EQIX - Earnings call transcript Q1 2020

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Operator

Good afternoon and welcome to the Equinix First Quarter Earnings Conference Call. All lines will be able to listen-only until we open for questions. Also, today's conference is being recorded. If anyone has any objections, please disconnect at this time.

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

Katrina Rymill

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

uncertainties. Before that be some started, I'd risks making remind everyone like to and involve of and are in we forward-looking get today nature the statements we'll

no be XXXX. Actual results may identified and press or the Form significantly obligation our from in today's filed Equinix our we in February and the XX-K call. affected SEC, statements most intend and identified including not those risks release to by on statements comment vary assumes made may XX, those filings this on on does with recent update forward-looking

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

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

a available information We website of and our supplemental this designed data. with to IR accompany other page made on discussion financial the along have presentation certain

remind in We'd to time you post like about website we regularly Equinix our check to also time and information current most the information. available important from page you IR that to encourage for the

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

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

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

Charles Meyers

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

a this the acknowledge want to evolving get moment to situation. unprecedented and approach in share results I times continuously quarter, of the into world our to we our the Before take

to by keep workers been First we who helping and and healthy as the who COVID-XX, us to this all frontline to together. hearts impacted go all gratitude our have are we foremost, navigate our and out those safe extend

set From and the to employees, protecting beginning, our availability economy; of we've this health the world. approached the customers consistent crisis the digital around safety up that and part our communities ensuring to continuity services this and with the of partners; stepping operation the and do mitigate the of priorities: a of people our underpin situation on of and impacts

Very continuity plans moved on, with goal our early of to incredibly this through I'm courage and to the teams and to are kindness the our day activated customers business seamless demonstrating each communities. other, in our ensuring care, of crisis. the company they across service we operations proud and by our each

our other dedication has crisis team through the conditions, and to rapidly and were been customers. the changing of forced our policies they to in situations As needs adapt unwavering, while to of professionalism procedures operations safety keeping years, to first as responsiveness particularly many the ensuring our

at Thanks facilities operational, teams, to our fully and safe, available all-time customer remained our high. have are satisfaction scores global our an and

is no fundamental case, crisis organization, COVID-XX exception. about often times the is reveal an As and of insights

we to our a have find with. culture our of that your reference value XX,XXX like into people before talk puts and life might me better we a way strength truly is tremendous force resilience committed to day light First, of to flux, that quickly every people remarkable business every global sound you and the A to of of culture. be pandemic seen your or the Equinix. and but magic our about ephemeral when a aspect We reckoned many, realize

demand created in for work-from-home the customers The even of will from experiment normal. much which a has calibrate of find on that of believe plays but Equinix a a our we spike sustain only we're variety massive we magnification as in near-term we of which our ourselves, seeing role Second, operation of new customers, basic the not society. a

the customers transformation And relevance a have importantly, focus characteristics this to perhaps on Equinix the increased of efforts. from relative see and most as supporting of their long-term have priority unique digital these highlighted we resolve particular the in crisis

continue But a like has scalability experience the for Edge, an in ECX and real-time our to even created Network economy and of also more Fabric our the the importance by that highlights and need distraction deliver us level the this services overall crisis for of on-demand friction reinforces digitally-enabled customers. to efforts provided

maintain discipline focused and for finally, And on has stay past the commercial it's the us we must value of served decade. well where long-term that times creation level these like so

the to our continue maintaining make of our us realities, sheet that through and wide outlined scenarios. priorities range current face ensuring prudent of We decisions balance a will I the sustain in

underlying vibrancy have These explicit $X along modestly limited to strong and business. to some us led which rapidly decisions, rate purchase performance is business particular installation the continue market-leading in interconnection of approaching full with run franchise, year with see guidance, delays, but we our billion our widen

of strong with midpoint guide healthy QX, the on year basis. for a we're reaffirming a a remains line sight as constant a funnel to AFFO and Our currency our

uncertainty Equinix are for our and We customers our that to communities. be enabling our model resilient us delighted to the through continues employees, of business times step-up

us, magnitude the many and about undoubtedly optimistic front in much opportunity Equinix been of the still of of future never ahead. more and challenges are I've there uncertainty While the

growth. to robust to results. the start Now, We diverse details demand a strong the underpinned had and turn QX of great quarter a year, our delivering bookings, by the and me interconnection let customer

customers, as continues our quarter bookings in scale to We in more deals over retail our up X,XXX year-over-year. expanding response Our bookings X,XXX the than opportunity. to processed with substantially go-to-market engine market span cross-border

on for billion, up AFFO Turning to meaningfully expectations. EBITDA slide was our ahead X% up depicted X% first year-over-year was results, our as were quarter $X.X year-over-year. the revenues of Adjusted three, and

a portfolio a and last quarters variety These growth our customer strong a constant cases. Interconnection rising rates are of and use normalized few reflection needs revenues and supporting demand in steadily of across year-over-year, currency all on products, grew Interconnection XX% the basis. of

We is interconnections consecutive combined. set and of the of quantifiable reflects than now rest competitors that portfolio the quarter XXth value. XXX,XXX interconnections customer interconnection a driving XX top adding our delivered more over product unique have Our

incremental jump fueled we Peak traffic over XX% added a grooming and network streaming increase by pause. spikes. conferencing grew an a in QX, X,XXX and by a traffic video offset interconnections QX In quarter-over-quarter, work-from-home year-over-year and services significant driven XX% slight by Internet Exchange after

growth scaling ARPU and as ECX be a of to total. inter-metro the become Fabric provisioned a Customers volume higher and QX. ordering previously larger And head growth a in capacity connections into and are bandwidth capacity continues spot with into strong we XXX-gig as new share bright

ability closed hybrid architectures. we enabling to metal physical software seamlessly March, and leader speed and accelerating deliver to Packet, bare of service In our infrastructure multi-cloud both and providers deploy and at our acquisition quickly enterprises

of and metal businesses range platforms of emerging their category digital that rapidly fully integrate geographically choice deploy single-tenant a support infrastructure secure high of to application Bare workloads levels on of a across is software distributed management with vendors. performance enables to hardware and

edge. both market integrating vision global businesses strategic enabling to platform new service Equinix use that public private evolve metal digital our a require at as platform cloud to part the is time accelerate companies a This reduce while and infrastructure. and interconnecting of Deploying and to on CapEx allows cases bare Equinix,

are to acquisition to that XXXX the expect board welcome to the breakeven on excited dilution Packet in from be We're pleased report we a and team roughly Packet perspective.

GIC, the In xScale Europe. a with launching April, following JV in Japan our next new success our milestone with also initial our JV in in we announced xScale hyperscale strategy, of GIC

a is cloud superior on ecosystem, in our and us while world. presence in strength existing and critical approach element balance sheet capital Equinix' leadership strengthening major strategy amplifying and leveraging returns our the already the around in go-to-market deep xScale Our markets to our allowing position deliver substantial invested

verticals. cover let highlights Now, me from our

network its well achieved third activity as by bookings, support work-from-home to driven for vertical network highest employees. strong upgrades capacity meaningful increased bandwidth as Our reseller

Expansions Reseller to access a improve Goal telecom customers ECX Fabric transit Latin locations cable edge backbone, allow deploying landing a America. America's Data, IP of offering XX connectivity their station global with leading as in Internet across utilizing included a advance Electric, as well nodes enterprise Hurricane real-time to provider leading to

services growth and capital new XXX by market logo vertical Fortune meaningful APAC customers. to wins. saw sector in healthy adds led with Our This financial diversify and continue Global XXXX

XXX services firm their New services ecosystem included re-architecting five Fortune a top eight financial our currency and securely dense locations. accessing wins partners exchange tapping global and ecosystem across expansions network and a into financial

content Equinix. nodes and delivery solid support A on as with bookings platform demand deploying examples saw video extending top in and Zoom media. to explosive good strength demand scale media coverage to of coverage Expansions TikTok. content of media COVID-related scale its well edge as and market platform included social support Our platform. social their Two XX digital vertical

cloud and in ECX led IT Expansions to deploying and IAS increase infrastructure strong MSP saw access. customer by Fabric new and security company, vertical Link significant support deploying ecosystem product Fortune participants. infrastructure and offerings networking included XXX Our also to and worldwide [ph], a Japanese bookings a APAC support experience

Our despite government, education. broad of strength, the and reflecting friction healthcare, bookings enterprise including quarter the COVID-related vertical saw healthy in half back

on platforms. enabling speed, of focus and solve We move digital scale firms infrastructure continue to helping while their challenges next-generation the re-architect to security the to

to well to deliver Brazilian transformation digital support as healthcare regional and experience performance. included a deploying infrastructure Inc., wins customer New U.S. Phreesia platform, institution deploying as enhanced a improved education an

see range productivity accounted with focused Our as this we this from industry go-to-market for wide well response. channel vector. as highest channel of quarter, transformation COVID-XX approximately over segments XX% efforts deals We our bookings, and across with digital continue a ever, projects great program wins on X,XXX of to processed

from for wins for U.S. optimized this Fortune a speed performance, deploying multi-cloud and solution to joint a solution a enhance multi-region SD-WAN agility. channel elasticity and a win XXX notable centers on-premise biopharma win premier with Verizon for British quarter to firm, data a retailer included telecom and hybrid with a transitioning New

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

Keith Taylor

everyone and quarter again another Charles very Thank delivered solid performance. you, to California. from Equinix Burlingame, yet afternoon good of

day the including many shareholders. teams, meet from to strength stems out needs the our come work our and success day Our others, of so and to of our in customers who you,

set We quarter. right of positioned of produced quarter delivered a the out year And second significant in value best again and started yet our solid XXXX engine in the gate, the as It go-to-market bookings diversified our our beyond. QX the create was bookings well for history. team to

but here accelerated we relevant, is platform challenges the sit know quickly today, shifts only by COVID-XX. as as believe not the digital, the we by firmly our opportunities and just even more created to essential So, we world

which are early QX, Our Packet closed both tracking in xScale expectations. acquisitions, and our against well

already are we both JV into and second for and quarter targeted we other which platform to rest ventures looking entered look market, our opportunistic. end, the third our at continue Asia in joint to Japan after close acquisitions, we and And enhancing the and hyperscale Also other the for of expect for QX elsewhere.

remain a selling global activity reflection platform. Our that inter-region strong, our well we're across

cabinet positive We basis. continue net resulting to firm pricing in on enjoy a currency-neutral very MRR actions per

quarter, of two about balance funding XXX-day facility. the sheet pro new on our after cash $X.X lastly, acquisitions for And our unrestricted this we forma billion have and

our have support growth an to We incremental expansion liquidity and initiatives. $X.X of billion global

have XX XX currently pipeline countries. major across We active XX an in construction metros with underway projects

impact as We in certain the close to capacity possible partners continue to and dates for our our our limited dates we the to target closely work made adjustments the while a with year. with as few guidance deliver service for suppliers to minor on ready markets,

And and maintaining are of expansion our active full year guidance. expect another capital we builds year

said have the capitalize on position we shifts customers, industry before, markets favorable and sectors, us and As of volatility. the to increased across also trends, business but diversity our weather puts we in both believe a highly verticals, macro

I revenue the to reiterate industries current is we our employees, on importance energy Also, than want X%. our customers place and and travel, our the Specifically, retail communities. less our to exposure

restrictions our you provide me placed two protect both customers. and We examples: employees access to to certain on Let our our IBXs

impact time. is This thing we're to been but affected circumstances, the for Hands Smart a in a professional direct our period current financial As right a do. short-term revenues, our reflected on has This providing certain of customers services in to result, guidance. adjustment three has the

IBX while to other stipend their requirements X,XXX cash one-time than a help to provided address communities requirements. shelter-in-place were Also, a personal their work-from-home needs, support the greater bonus received them given all help in our employees employees

the range revenues absent quarter, $XX were for and million was both As a result, On first million, to top adjustments, a the per revenues impact guidance $X respectively. above and our EBITDA AFFO our COVID-XX of the currency adjusted constant were share COVID-XX end the expectations. AFFO and basis, adjusted EBITDA above and and and

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

on consecutive same $X.XXX depicted were revenue year, the slide last revenues quarter over QX As quarter of growth. up four, billion, global X% our XXth

of with the particular million British net hedges, negative compared guidance included real impact impact the currencies weaker a revenues, FX prior operating FX rates. the due QX our and Euro, pound, $XX to our Brazilian to on when

Global to the million, X% the up compared increases prior strong quarter flow-through due to QX and adjusted EBITDA and last $XXX year, over was from X% mainly deal mix. quarter same revenue price

about our million attributed in annual conference. sales costs seasonal $XX to had higher we reset typical, and QX, of is FICA primarily As the

rates. a For negative FX performance, hedges, QX impact our $X FX adjusted guidance when million EBITDA net to included compared prior our of

basis our and income strong $XXX QX million, interest due currency than Global was lower to expense planned constant expectations and on performance a operating taxes. AFFO above

offset is our to to And share such, strong AFFO performance financial noted, basis. at constant and reaffirming Our Charles guidance on COVID-XX. as impacts a we currency related are per operating AFFO expected as midpoint

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

and high our price with saw region gross and PAG of to a the highlighting strength export small platform Americas pricing. the selling best-ever global to substantial expected, regions, region number continued value of activity Also, engine. the the adjusted the bookings The as two Americas QX Americas its other of deals healthy or

and included networks wins service providers. work-from-home Bookings mission-critical digital infrastructure with

We expect X% to we to growth revenue as through continue rate Americas to the greater trend upwards XXXX. or progress

growth XX COVID-XX. saw limited across impact region and from its EMEA metros Our

which reduced Demand our with largest into London, Paris, timing firm. channel Frankfurt, the installations strong. bookings was weighted of activity well. year, towards be in Deal cabinet due which as our to billing was prior delayed installations very markets, markets EMEA expect driving to four last very this quarter we both year, QX QX. in over remained solid and being And QX realized in smaller pricing Amsterdam, cabinets

Shanghai. verticals saw Asia-Pacific the in in need a significant bookings Kong uptick solid with Demand record and across all organizations, strong increased given extended Hong And for region with was mandates. many a bandwidth across work-from-home

structure, capital refer to looking now And please slide the at eight.

sheet unrestricted additional $X.X capacity we the an unused on position, $X.X of revolving cash quarter billion liquidity our to relates it As from ended our of with billion line of balance the with credit.

leverage debt net X.X was Our ratio times at QX.

acquisitions up remain slightly the the to the to Annualized shareholder we adjusted due to EBITDA cash used committed Also, complete long-term value. steadfastly quarter. in driving

continue generated cash And also we accessing appropriate. and equity while the the fund business the to operating debt flows markets business, capital the from by will healthy as both

our volatility important review debt a existing net our value proven investment-grade highly year has the note present refinance Despite Also, debt achieving investment-grade Equinix. a basis. ratings on to that continue recent and to strategic an last be to we positive opportunities in for milestone markets, the tranches

be that outstanding there the portion do debt And possible We currently refinance in current a debt to guidance. would our or no note, over of without being per investment-grade attributed not our And benefit expect is rated. refinancings XX next today, the to share AFFO AFFO months.

Singapore, two IBX opened Turning Frankfurt in quarter, million, we new million. our slide in two approximately in and markets. low $XXX a CapEx quarter. strongest expenditures seasonally other of global including recurring nine new We expansion of $XX Capital And the to two projects, in including for announced the the were one new expansions Warsaw.

Australia. from France assets Paulo owned purchased one by percent rise Also, acquiring but land to XX%, the to remained of development this our recently we expect we Revenue ownership, in continue We IBX. both the at and end São for expand our year.

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

revenues by a Our now year-over-year constant currency XXX stabilized basis. assets recurring increased on X%

Also we of consistent the our categorization QX, annual year, prior during with completed exercise. refresh IBX

stabilized assets the return net by a IBXs. XX on and collectively asset invested. utilized count gross cash-on-cash PP&E XX% XX% increased stabilized These Our generate are

XXXX our the and includes refer the results Slides note, Packet guidance XX bridges. xScale and guidance from our to financial XX please And Do XXXX summary acquisitions. through for of both

a momentum compared growth of of FX the we FX of net negative to X% revenues, X% million, includes impact reflection for to deliver in our with a Starting hedges XXXX, rate continued business the to $XXX our expect and prior guidance. a

in And the Also, we XX-month to expect remain between MRR expected ownership to the period range our million to X.X% attributed revenues targeted per the quarter $XX acquisition is for Packet million. of of for and X% year. to our range $XX churn

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

integrate integration to incur of to remaining acquisitions. our $XX expect XXXX, in $XX finalize costs Packet million integration the million million of We and to $XX various other the

is expected XX% grow XXXX and previous to between year. to the compared XX% AFFO

excluding expect activities, XXXX, and XXXX X%, long-term with Including to we Day. share than our discussed share greater capital market growth as For be market our at per per Analyst between AFFO to XX%, objective, AFFO grow consistent per activities. AFFO we capital June X% share expect

the call So, let me Charles. here back and to stop turn

Charles Meyers

engine the service experience. on operating business out customers' and evolving the long-term our enhance well, set business people; customers; we is portfolio focused to the drive fuel Thanks, performing our go-to-market changing our simplifying from platform laid needs the and COVID, to of investing and meet the our in to remain our of growth; expanding Keith. of at Despite Equinix and beginning leverage; clear priorities the challenges we year;

remain talent will service liquidity, balance IBX from technician investing enhance flexible, engine, we expand the top share operating we a hiring while and set navigate prepared to and our company diligent, as to tracking in new continue lighthouse a shifts an how growth focus across our our sheet AFFO keen environment, on closely safety increasing we financial ensure As business. the to up to and to profitable per and development all for uncertain metrics selling maintain disciplined, metric

market have our dislocations, to orientation prior leadership. objective prudently in long-term we clear As we the manage will extend and market a business with a

Equinix the to our resilience portfolio, scale product breadth As sheet our balance and continue enable capture of will clear, the and only passion platform, people the our our aggressively make will and our unprecedented crisis this other storm, the execute but opportunity weather the us and the critically, on of customers lies of not massive the depth to to side position of reach that of ahead.

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

Operator

Instructions] come from [Operator will JPMorgan. Our question Cusick Phil first with

Phil, is line mute is please open. your check line Your button, your open.

Unidentified Analyst

seen Hi, Richard did to this of start it on And have Phil. quarter. end? for get you Packet. sense recently? to is it better steady? off want And what pretty through I Was a follow-up quick the bookings more a Or the then just the at fall

Charles Meyers

-- I -- level Hey sort became a some Richard. friction. saw I created first of was quarter, bit as the Yes, I situation quite couple And we was for of think COVID think there think, that as we a then definitely normal months. it saw uncertainty more acute, of

actually strong conversion there the really in again, buying quarter had a of a that system, think, early was, say the some but we with generally. I saw quarter. healthy in board friction QX would Although, pipeline the and pipeline strong entered I But we really across

in more of more And to I also return to sales our and I is this accustomed setting. team bit normal selling what a seeing driving we're we're becoming early think signs think really cycles the seeing right now,

bookings about And we of feel the continue to good engine. so overall, the sales productivity

Unidentified Analyst

expect I scales really it wide year, of can growth? a stick this looking it Or should But a more out? we steady bit Packet with then we more pretty as has beyond of a guess, see And hockey quickly, range. kind

Charles Meyers

great that small question. growth I a that a do now. relatively in think obviously can That's business It's we accelerate business.

metal with immediately infrastructure proximate kind associated a private of bare there's opportunity public to think this the I meaningful cloud.

able it in think fits they're desire responding more frictionless way, what the to deploy of infrastructure really their seeing COVID terms a how to I by of are with in well way. and people And be to kind

we Hat, it's extend VMware, cetera, And people our and feature so and that as platforms invested multi-cloud a that software with hybrid as think us we players architectures. real deploy Red to going we et significantly enterprise and like as really tool add set, be people the have for partnerships

that when in opportunity growth more think to a reset give that. us offering. I have we So, expand an talk to longer-term about you do I guide But there's that we'll and think for

Unidentified Analyst

Great. you. Thank

Operator

RBC will next come Markets. Our from from Atkin question Capital Jonathan

Your now open. is line

Jon Atkin

much. very Thanks

level. from seeing of So, impacts Any Europe merger two questions. kind that the in One, involving high interaction? you're

of on a have we're or COVID rate but then pricing Keith now Charles. took We're away from adds And and second in settling now are I we in Keith's you. May into comments the actually kind and kind beginning cabinet where settled either that pricing. Thank is for out kind one of healthy, things of pretty that around terms where adds? run out of cross-connect

Charles Meyers

Sure. the I'm first me Jon, Remind sorry. one,

Jon Atkin

from noticing any and that--? involving merger impacts interaction, any opportunities with the you're Europe the

Charles Meyers

I Yes, in change meaningful we really demand environment haven't and a competitive Europe, to be our the strong. seen continues in think

I healthy bookings think as European the as theater. strong pricing well we're healthy and pipeline in seeing

determine there's really any We'll change that seen to So, a if continue if and change. to monitor -- haven't that's we meaningful that.

in sort out effectively. script, yes, cabinet add to And in as I of and adds we're let it's the navigate in to here in pricing, pricing, I'll broader of interconnection Keith think of sort as COVID very then our relative pricing how we cetera. settling terms Europe, said wishes. adjustments firm in et But the particular, in he continuing

from adjusted mean booking I standpoint. nice us that's price I think given some lift gross a

particular was from Europe every for out saw push now into basically QX pull is oddity by I something out a cabinets and cabinets happens QX into a of which a think QX. then, cabinet and QX from that caused adds, you forward

QX. we're things a a we very averages at strong to But so the going QX, always rolling demand. cabinet I And on and to one reflection saw of I saw a QX. you think But on obviously, going we I weaker that's I -- do think encouraged a think you're of see four-quarter think just see that's we've sort to don't look adds. strong

think as back, maybe to be adds lower, saw there, mix. really where you were hyperscale associated slightly quarters are adjust deals. we look there cabinet I if enough large Europe, cabinet going Because our particularly type adds you continue to far in in with

really We would retail that business. xScale to obviously, JVs the capital prefer, business high-return keep and our direct to very our to the applied capacity and

And so I think core that will there? impact we're impact we cabinet adds how and to to, of have some think add it's degree, other but on guiding metrics. going that's fully again, contemplated kind to business, the Keith, favorable operating anything in

Keith Taylor

that saw comments, further we just across Charles, not the business. pricing as strong your about that just us we the that about important, net again, in on it think see, a confidence it's gives actions. to is pricing We positive our the Europe, saw talked continuing currency-neutral Jon, make it I'd fact the there's which only we platform, to comment And platform. Europe, Again, we're across it's basis. not but

Clearly, that some also of we the talked our value it to some to cabinet impact currency part there on alluded offerings, it, our of Packet overall, was earnings a service is with what we're continue in But per doing. share basis. what metrics about will our view Charles add deck. other we it which to and we're And and delighted

sort a pricing that interconnection attach lends And Equinix. be of going of be rate, higher for environment to to strong. to a is continue and all think think more to there's positive I going I

Charles Meyers

and more is a from your takes. productivity add I Richard's color prior And I of puts bit bit kind -- might, standpoint Yes. Jon, we're question a and and have question. of bridges What just that might selling between finding of one booking overall kind of

greater adjusting, There's I QX, relief are been the getting -- of end friction seeing that. decision-makers. as to the near some towards I sort think, to and counterintuitively, we're we're term said, back and on some associated where interestingly perhaps we're of, But seeing there access was with people

a of transformation to different aggressively make kind be to -- needs. and having on move a forward are we having and part decision-makers phenomenon, access digital greater Decision-makers seem maybe their commitments their having schedule seeing resolve to greater with to

Now, of mean greater depending on I their transformation. how digital depending of, terms it may if But they're and on thinking think level we're seeing issues sector how some acute just anything, about of the cases, delays again, resolve a other might some be. out in in

takes. think So, bit we're of QX I a the start puts pipeline. again, to and good a about it's and strong But off feeling in

Jon Atkin

variability bit about can one squeeze little what's I was If CapEx. maintenance talked just kind of Keith in and you quite on a But for the mix It significant, that in that. of bucket?

of towards? And going what's what you're levels us you up what of that, surprises source what kind If around normalized I of the that forward? maybe Thanks. guess, were the leading -- variability the were the that review that makes what's and

Keith Taylor

started I than quarter the of X.X% the was revenues. bit. all X.X%. part to a this of to as last less certainly, we slightly anticipated, see same If it little latter did we're go roughly quarter the We down Yes. year, things slow aware during Sure. Meaning, quarter,

fashion. surprise different No parts of as in were into restricted more world. also the our root took things IBXs a We putting

you looking said, at still roughly of overall around X% all somewhere But to that is only will maintenance. course, that is when recurring into guidance, a our and our we're look $XXX of that, recurring $XXX CapEx maintenance, at go capital million of million portion of

our see Roughly with you'll on a then little see we QX. what That's expectations be you'll reflected a year, And guidance. more year, saw in would bit it. the so go-forward back last level the in it to in for than And traditional line lower basis. a go but roughly

Jon Atkin

Thank you.

Operator

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

Your line is now open.

Frank Louthan

impact coming could questions. business Great. kind One, think Thank being any back might you it of some as be grabbing you. space, pulled of forward the from recent are customers half. strength Two the

conversion think And facilities. the them then do on been more be those are up folks rate then cross-connects as and with virtual into you've you well converting will what doing signing permanent and Thanks. as those

Charles Meyers

are questions sorry, the I'm Frank, me These -- lost double killing first I The again. today. one

Frank Louthan

any Yes, seen, just headwind that that business half that's coming do think maybe pulled that from, and-- any be strengths say, then from you you've the might a cause back recent forward of could

Charles Meyers

Yes, I think so. don't sorry. I'm Yes,

I that as think a we're think that I seeing response.

I or that think over that the question will be of not sustained time. creating demand whether is the

a that's networks think people capacity. up part, delivery a to I of had their their The headroom chewed for with overall most and think headroom. certain question. they people amount the amount reasonable that design design a -- are work-from-home add where but they I generally, systems obviously headroom scramble of to certain with of a And lot

think we think a I in helping we headroom and I that there's I incredibly new were But that. increases the moderate some do as normal. more people responsive that towards think chance -- don't

so factors. I to any that we're other barring think strange by I normalize, back to don't the And other just of impact or it's huge kind I more think it wave dynamics. kind because -- more second But it going of in have some think a a degree was we again, hopefully, of to half, there any I burst think don't will going saw offset

capacity and constraints creating I not were in So in from very think back markets I shape, in a ways worried of half. most think good parting about don't with the -- that and capacity situation, terms

strong about And more the gross we were several terms total as in what of end feel we very quarter, were a is We guiding years. the in but business good again, adds of strongest interconnection, I had the really count, for the way low trending. towards

we associated the are to we but consolidating we of with churn in -- both is real grooming, and networks going think activity terms undergoing XXX ARPU people had people cross that's with associated network migrations some some of also up, the elevated consolidation in and people some about seen XX acquisitions buying and who of one a talked the reflection things script virtual -- that. But connection, ports. And

then And and that basis. ARPU in ways increasing on a provisioning driving the cross-connects them traffic are per-connection on

seeing our cross-connects. so not that And right line, actually better, in we're physical than if

on really the really, pleased we're Fabric. trajectory with so And ECX the overall

Frank Louthan

Thank great. right, All very much. you

Charles Meyers

Frank. bet, You

Operator

Our next Citi. from Michael from come Rollins will question

open. now is line Your

Michael Rollins

questions; have I I'll parts. up into Hi. two it break two

interest are enterprise said was kind XX% force? of get you other that the curious, that that this own do versus into pipeline the in channel of it there what's the what about The that is strength? adoption? channel quarter. you looking think, driving your bookings Are first driving the Is up? is your that I'm And thinking one sales is visibility just that things disclosure at I

Charles Meyers

that -- Sure. you Is have one? Or was do that it? another

Michael Rollins

only things I COVID-XX. for I was described you the mentioned conversation, Thanks. Or impact Hands you for waivers. Smart are some guidance there When range that clarification is services? the Smart impact think just anticipated to $XX were going was Earlier zero in ask Hand million And if to curious revenue in waivers range? fee from other also. that that a just

Charles Meyers

the Keith and as and one, Sure. the on first I'll appropriate. comment can then take second add I'll one,

the again, we excited yes, say And momentum channel, channel. to about very have attributable market, So, Mike. in it's largely the I would enterprise

relationships, long-standing with think I whom they -- seeing where our have effectiveness of vehicles, We cetera. the et terms really partners reaching in we're that's existing contractual of enterprises channel

the partners, also we're then they clear seen our hybrid with hyperscalers the of as combining full by create value that demand cloud. for a well, the have of channel fall some our very customer signal to way, theirs sort And now solution. into And category a with as of where

satisfy the resolved coming bringing a cloud help hybrid need they're to restrained private and that If requirement, then them so demand. cycle us us, public they sales cloud they're can by allowing being to in portion the really seeing the to us get the that satisfy of

across we -- slanted of of the verticals, a towards and definitely solve combining And that very our but terms really in across needs. partners our a so but to range it enterprise. with range customer end see channel of also value partners And of

that terms And would I what what I refer today, you visibility, tell we is of then in to with channel. are a sell as primarily would

the client, a customer. of still in we're are a with phases value generally, we maturity are Equinix So, sell not yet the They're They point where, our and team. engage own. people on the jointly. their typically channel selling sales earlier at We engaged relatively proposition

the total of when in but relative to little channel bit value. the well We you really partner, rep cost customer quite consider as our lifetime comp direct as there, a it modest

visibility. getting And really we good so are

they to deals And have paid. get of register to course,

really get So, to side. the visibility channel the overall funnel good we on

sort the you on let the revenue handle So, Keith, of the I'll discussion guide.

Keith Taylor

Sure.

in remarks The million there had lot revenues. global going second prepared Charles we and uncertainty a the really with the that reflection. pandemic, really to his the $XX vis-à-vis QX. strong that's question, that, commented There's It's zero a some a Mike, been on has Having created. said

great very a to start QX. alluded we've had to have a very, Charles pipeline, healthy fact that and the we

doing, Could of are book-to-bill recognize so we on business. implications when All many said extension Could pipeline? that. we've of that there cycle? planning, be be about scenario we which there potential I And the the things. assume are a weakening about and different others what an thought the of is, the the think And course, we

implications million. Again, COVID-XX to seen sized what understanding forward are haven't the but look these examples. of you of we yet, $X hence, we that as are the pandemic, And overall $XX in it

said $X That million, relates sales we absorbed certain was and placed it on then million in million basically because having to IBXs, will that the Now, Smart our cases, we've that, Smart customers there services a free the of were in that small we allowance already. $X offer with that place. put restrictions first quarter, Hands of Hand $X

will, back will rest we're the up. the until some to customers basis, if continue on have clarity on of we business period go-forward to those forward, on open a for continue basis look we As And how, better will selected Hands. around offer you therefore, going our the a that businesses world certain to and Smart

on already invoices on that what need make thought to relates business, we've and to the things are of that. companies have of it all are go write-downs concessions that that implications whether out to about generated, then been to customers And as other reflected we we've

revenue the here. that when we at in deck, our could for page of have hence, plan delivered a sense And earnings pretty guidance that are scenarios we you what you look good the

business going that, at the said the we're all to of having run Yet or to deliver target against better. midpoint AFFO our

you sense -- free customers. you select to our And right so of selected now, Hands the for sorry, customers gives anticipating. there's that But is of can Smart thing I we're sort cases where concrete most a to we're what delivering certain tell that

Charles Meyers

level than And accordingly. for was some Mike, than concessions. -- those that mean, course just to that and us items the consider range uncertainty And Hands, to Yes. year that I be and try duration -- And of by see Keith could just is adjust is like as impacted book-to-bill it size the other of a give indicated. it more the of obviously, as we'll Smart those given let's what what and impact modest the more about exactly here, that it prudent say was argued during and depth just

feeling discussions customers, limited we're early feeling about the again, are which to concessions, cetera. relative having QX, But quite good start to good et about the with we're

good feeling we're so headed. And where we're about

Michael Rollins

you Thank very much.

Operator

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

Your line is open.

Simon Flannery

the JV? Thank latest you very to evening. with I Nice a Good How much. xScale could are the Great. you bit on progress. the going signing see if initial here. us wonder little things update

items Thank calling go down was quarters? couple back upper whether you're onetime the the think previous reiterated the you in were of remain of last that to two at so likely you've theme, to couple to end And it you might you. more the at you been then you just on over Or X.X, where you had next that X.X churn range. out, the the Do continuing quarters?

Charles Meyers

Sure.

is xScale going well. So,

construction But that terms us that of the lots think with in critical, a large side portion business appetite demonstrated of strong demand customers. and large-scale a always a of dealing and the all the certainly of demand. comes demand. as business demanding projects as building there's for with to large well like their very I of also think satisfying important of both business side that It's sort the they've -- and the be strategically footprint very and but -- complex I

we're have them as out, pipeline well. only we with built And for already but for strong new the not very so or markets that projects and engaged seeing a underway

and healthy it at hyperscale. our all costs And I've And planning to really dialogue we -- chase and always said, share wasn't so vigorous after market with very customers. as be aren't

view is critical -- work work Our we generate being to to like those win we're we conversations. to cloud the and we're successful -- very market that think in is we positioning feel think ecosystem demand

and bring difficult. interest lot a well-positioned. We the the market. we're excited We we're therefore, And think think had that supply going be scarce in And a think of then it's to obviously, we is think that Japanese -- terrific to capacity about We we've projecting we're JV. very to market. and somewhat

as good already. world parts the feel Keith And again, really I in as JV with other underway additional So we're that. around well about indicated, conversations

just we bit I X.X would some to that the we're again, But the higher of adds that to did end a And is the and cabinet towards range. Relative we're EMEA churn, that -- brought are just bottom doing But we we, -- we're end. with manage everything can range. that have of comfortable comfortable in churn to I impacted the little us think two towards range. course, reiterate,

Simon Flannery

a Thanks Okay. lot.

Operator

Ari Klein Capital Our from from BMO come Market. will next question

is now line Your open.

Ari Klein

some And kind of you in to Thanks. in Chuck challenging logos is you new there the current are what friction How add Charles, the mentioned with to doing that? enterprise. environment? help -- it

related -- it mentioned of net And impacting network you then is cross-connect COVID? some Was grooming any Or adds. to unrelated? that the of

Charles Meyers

a Sure. unpack tried we did good in quarter in in meaningful customers less slightly logos, and material see particularly would we new quarter not a had the terms first Yes, way. -- see lighter than was on new two-thirds I actually from say the that a we and was and of in And it we of has, bookings -- was it our what back do half. but that the to

our account of take line actually an learn we're I without setting. set a do new skills the more new But sales effective think that that tools seeing around be to already given having I a harder. finding to able And teams, think we've over of number root. interaction. we're get it's already being that physical to in fully We're the

we think And if I obviously, of bottom some think to just level that's -- we friction. when that. of is why return the about be a need we to some And that is that. that our of the talked sooner widening really -- there little I And range rather form we some is so reflects cognizant but later. end end of of bit; the -- it bottom than normal And are there hope

additional with to is it consolidation some associated even and as feel did network to XX productive. associated we in with of kind then team It logo some XXX fairly with be some network associated But grooming, it then is was the COVID-related. relative migrations can capture we new sales But acquisitions. friction prior And no, also level not see without that, like undoubtedly. there of

bit of And saw little not atypical. a a so it's and we

slowdown quiet of QX a usually You some that sort because take then in in activity see network of And of of sort the QX. place you periods. see

not surprising particularly to So, us.

through I that where of do to probably I some point XX a kind lot of continuation to as think going electronics went a it route said, because with be the they're to as becomes economic based bump a minute going the analysis, now do that. initial -- largest there's somebody But And at of clearly of we're XXX their that players. to on upgrade for of the

are going be quarter with little that feel a gross to sort we there, the $X,XXX bit adds but of particularly comfortable that encouraging. in really guide of $X,XXX there's to So, per and

Ari Klein

Great. Thank you.

Charles Meyers

You bet.

Operator

will question Colby Cowen. from next come with Synesael Our

line is now Your open.

Colby Synesael

follow-up entering environment your Two have January Jonathan the thought they One to you. a may year what Xst. had question, topics. we're new asked. I Atkin think, you about be full versus year When to is bookings Thank that going Great. in the are you think on the related for in

have and the today full versus you on the the same, or one with year thought be down, bookings for puts expect would up of to think what you all you XXXX? January that Do takes

given lot more Remote number seems relates it that Rollins' mentioned actual $X $XX it's it that. know quarter, as question But the the in was than million, secondly, $XX obviously the million, think you then was like to versus first in disclosures, I I it a Hands. And the million the on

the necessarily Am course yourself will, of I really something that as upside source conservative that am what that for -- we just give right could not potentially now correct be therefore, kind of seeing and the through could be year. it's a you happening, and, trying of you're I fair a actually be to you're if but go plug,

question. And housekeeping lastly, a just then

guys supposed to You in your in June New are York two-year Analyst have coming City. up Day

Just curious the expectations what are? there Thank you.

Charles Meyers

Great.

if than the be looked what and we what than the now jump going I'll the maybe of that Let ask beginning of in it's for in, to give then we the on better bit status Day. worse one, little what's at bookings, year. terms the on me you as I'll in to and same, add expectation it comment said, or on our But a can sure. talk our maybe thought coming we first second one, to would Kat is be about Keith into Analyst and the

therefore, the of midpoint of downside we've will guide; bottom terms that that risk by think there we're I think virtue revenue. widened I of Obviously, the revenue on in balanced our slightly towards bookings indicating fact and, range the the lowered be end and the

But modest. fairly is that, that risk actually

beginning Again, characterize peak would pipeline, to and the sort the were so I where that that would strong the very factors strong it. think QX QX strong at And we've see COVID impacting of QX way some us I we of friction of bookings, be of signs of sort moderate.

we that be would -- we'll hope our see that dissipate. so risk that, will And

during planned. an we us opportunities risk that that's there's I from end, to had would also for we what lightened originally bit accurate characterization bottom think the But I a me is Smart see since But more we little think downside the is, that. of of a which that kind the to Hands, all is continue second all one? those to of portion is brings it's question, which in Reiterating close course year, gaps the it

but meaningful other a et $XX delays, of book-to-bill than obviously, was that, of terms QX, If we contribute in relatively you also impact potential Should stub that short see, cetera, -- period. sales to throughout million that there's QX, and might it made would as things would a of that. portion Keith in which reserves, then million couple QX, occur that the But said, quarter. more obviously, a concessions and

I back normal best reflect mitigate to things judgment and were a how end. quickly, that business by the so even well to and gaps. bottom we think think up top slightly risks to that environment get -- in In if perform we close we we those environment, continues And thought can it more the the what this opening leaving our about was that the end

you what don't that to on know kind second that's say. have add topic? if would So, anything I Keith, I of

Keith Taylor

I think well it's Thanks. Charles. said,

Katrina Rymill

so your a our will given back. can large we to you have on going absolutely given York. back. out Day question very investors is Day Analyst all our host appreciate, we Colby, love on, We then, will And on be as hosting that event, but We typically to -- COVID, moving push New of Analyst

In outs and are I May times and reach to the Chip meantime, increase our all engagements, but having of very be amount were going June forward with to looking and active of and investor increasing virtually, the the base. aimed a to amount conferences,

Colby Synesael

Great. Thank you.

Operator

KeyBanc. Our Jordan next with question will from Sadler come

is line Your open. now

Jordan Sadler

that Thank a discussed. or you. follow-up have other been topics I questions wanted of couple on to

to you The of requests number concessions you And percent or have seen rent requests April, either requests the date? by and/or can otherwise. any reflected regarding either million regard or looking customers? of $XX have or some collections to those from First, quantify of with into your

book-to-bill. result separately, to relates book-to-bill? lockdowns or that you to seen of as of directly as it the as can then the What result you've related back on -- And any just a COVID, COVID maybe a touching delays quantify

in back timing a that in coming add the bit then you. if Thank attributable would And EMEA, the specifically, more to then was to And little the helpful. could on churn, color? what be that specifically quarter, you

Charles Meyers

lot, this a and I Sure. so wrote it you can concessions can on first the and time pieces a note there start down collections, but remember it. cetera. I make I That's with maybe Keith, et

Keith Taylor

can pretty early Jordan, appreciate, as still you in Sure. the process.

the referred to start really As feel to, the it we've of impact was quarter pandemic. the half to we the more latter larger where

our out, QX, of DSOs terms. reported and actually we particularly in Europe particularly improved, all those when for our said that, extended Having

XX our full day dropped one DSOs so days. to And

you a gives collections be continue to that it So sense very our strong.

though in see our are went even that quarter-over-quarter. receivable You'll our revenues our our up, accounts we XX-Q actually down went report that

it don't issue. right now, that that So gives a we sense as an really you see

into it good as we've coming in idea how that have look April, we we closed And see As pretty an now in, but April. a we're still we on issue. April, don't

good first Charles feel and as pretty both of month And alluded new we the quarter. I to, about have the

customers As out customers are who it that business, top relates and our XX% to do concessions. our remember, you represent concessions, are. But absolutely, there know asked XX top our customers there for of have

it it so to customers that will typically the time. don't far this be type at the be point the will significant And be for point I tail, have I that of honest, hasn't to given asking visibility some of just anything at at amounted end concession. in that

asked who or for assuming for will already have there who are customers that concessions we concessions. eventually But ask be will

you're in hearing out peers marketplace like and other Just the from like our industries.

So why back let just stop there, you, to on don't me Charles, pass it I the--

Charles Meyers

book-to-bill. the that And for and to implement we We maybe were out the having on deployment. a little that out date. finish saying, We'd we're do some see hey, a push occasionally, maybe there people Yes. this teams like Obviously, scheduled then to bit. specifics this to comfortable more our not like billing ask commencement on -- begin you on to

that, we those some types grand we limited the of there we fairly and of And some of things, but are again, is see think the think I so those. of scheme -- in think that I things do

thing given and churn relatively those there accommodating But some requests we're those. the And we to large right relative situations. to small think number then footprint of And was do the there's that's because EMEA, the a churn.

I it think would be of indicative typical -- it's pretty pretty it.

maintaining solutions. prepared our said comments, where were these kind do I towards continue larger commercial see in discipline, As footprint different of continuing returns capital really you lower-yielding my our on to people and things re-architect -- deals, in the

and And couple churn in but reduction reduction nothing there, in or -- in the an a that increase quarter in both particularly caused adds. surprising a and a cabinet hit so

profile, go into hopper. But EMEA. really the of we course, mix at back significantly to what resell is a favorable price cabinets of business higher margin given And right trend point and intend those on them a in

Jordan Sadler

you. Thank

Charles Meyers

bet. You

Operator

from come Our Stifel. Erik last Rasmussen will from question

is now open. Your line

Erik Rasmussen

thank then. keep very you Yes, brief it much. I'll

can xScale Just data on center the built your this your in comment see you and your JV on how market region the position? across announcement changes for Japan, you just opportunities

I region? who do Thanks. be, international that, in see you but you then your then And And U.S. just know been with markets, interesting? the there focused at do becoming what see on biggest the more as you've point follow-up the competitors would

Charles Meyers

Yes. I would the ourselves feel say very view as much I mean, look, we -- really good. a global platform. that we

see feel are and supply we said, I from ability we extend overall in set requirements, really bookings large global including in given to in around meet obviously, the and and customers' the our continuing our others and variety we constraints, that, Japan market, market therefore, comprehensive of to generate very supply just what and, being think about good the Japan, returns not solution as needs able strength strong a our what across increases constraints customers so world markets seeing to in we And potential think think strength as our as footprint, a of our I position, JV. that key utilization more potential

is picture. it bigger much of But part a

the U.S., our business We strategy, about there. of we're in APAC trajectory of have the customers markets then a primary an looking more part looking to that APAC. able the and Being deploy in excited And incredible they're key terms overall interesting. and serve sort to is in of

the to spectrum competitive think highly I some being, Again, a for situation, be footprint prices, very et in an like in end at and Ashburn, imbalanced cetera. which I large market with is continues pressuring it highly think, of supply example, the demand markets

very But think We in be we Ashburn. U.S. have feel -- health appetite in fortunate limited different for strong and will a in in our durability tremendous price franchise Ashburn and more I very business our Ashburn seen the that maintain our sure. in

that with of the Although potential capacity is Dallas resonate we proximity to campus look add immediate Infomart, I like having sort in would very that at footprint with. a think proposition large unique the that to we do a

we're the world. for just to -- very selective So think us other be because but there's opportunities better there around going we

Erik Rasmussen

you. Thank Okay.

Charles Meyers

bet. You

Operator

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

Equinix (EQIX) 6 May 202020 Q1 Earnings call transcript