EQIX - Earnings call transcript Q2 2020

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Operator

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

begin. may You

Katrina Rymill

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

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

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

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

information Equinix' IR President; Web us current Keith the With CEO page to also available have and our most We'd a like We our Meyers, Officer. Chief and site to certain with on you are Financial and in accompany about Equinix page this along data. the Web IR check remind presentation we time and Charles of Taylor, available made the site today discussion you to information important post for designed time encourage supplemental other that financial from regularly to information.

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

Charles Meyers

Katrina. you, Good to afternoon our earnings welcome second and quarter Thank call.

economic third our As and safety being remain our in we purchasing clear, we created enabling environment well, remains customers global our pandemic, world, and Equinix health, key to QX, enabling force macro of transformation digital health, increased and the on all Even a the decisions. our In the the business a in in colleagues, customer robust in the bookings of history our critical our inter in bookings, occurring by deals. changes small tenet global business digital a gross continues communities, various a and strength of business conductivity relevance social perform core continue as performance by in of delivered to priorities to effectively well and high navigate urgency respond focusing the best driven priority customers in an record of Americas and the and to in connection driving volume channel economy. quarter uncertain face continued

countries. scale in of continues go-to-market to represents now across three platform of expanding and the Our and scope continuing reach in the continues customers up expand as shine our fuel deals increase XXXX engine XX% to our than global metros globe, And revenue, business leveraging all regions customers. generating quarter operating XXXX customers the XX XX X% across across over in the customer deployments of quarter-over-quarter. We're importance our the more to

closing Canada expected landing corporations our opportunities key data On financially and and as a enter unlocking the a scale support quarter is Equinix acquisitions adding acquisition accretive to XX this location and to strategic of Canada has Canadian This hyperscale. terms. enhancing announced innovation as a executing commitment to platform platform on upon expanding disciplined Hamburg global in and to markets market. capture opening continue expansions centers, subsea tool continued reflects national new in our And platform. acquire M&A we're attractive QX, be using in X, to which Bordeaux we our coverage June immediately to a for organic intent growth Our Bell

get the of around to to community want of continued have results, into I a triggered on our an culture to the and Recent few impact a thoughts change and the the society. events detail world. on sustainable social we outrage outpouring a U.S. have Before of build emotions work the quarter commitment can that in our and share future meaningful our

actively as topics focus understanding commitment a this a forward positively on and on collective which as individuals, energy inclusive company imperative the into of as a fostering dialogue tapped a our each society. a other action, rich to is and moving improving social equity have with creating We of justice, and and to us

we While be I'm represent levels safe, I say early to culture and our in Equinix vision reflect still our every I remains clear our all day better And matter. workforce a which We demonstrating for acknowledge enduring at journey, remains in for employee, but communities strategy every where can this a truly competitive key against to and that belong in committed work we progress multi-year the a continue culture to our and that have differentiator. fully to believe do vision achieving measurable, operate. are to

targets, organization. happen employee will diversity includes believe even that further and only ourselves aspects in pushing equitable a pursuit approach the But by Our training traditional also global plan mobilization. such and our of truly and bias programs community we becoming change lasting as mitigation,

every how is a to critical every make aspect inclusion competitive at our Our and employee engage culture run and every seeking advantage, of belonging diversity, we business. leader continue to integrating Equinix the objective to and in

to continue equality a society embraces and commitment the As work that our in to will and vigorously company, workplace put cultivating reaffirm defends a in and we diversity. a

the had support increased our XXX,XXX These local incremental deliver to and by year-over-year connectivity providers best support normalized also cloud basis. a of Fabric architectures. growth. augmented reflecting exchange video we both investments aggregation traffic the healthy the leadership traffic new the requirements this enterprise currency now go-to-market XXXX clear packet Unit progress integration rates making in over as area. peak work for with by our to multi-cloud reflecting billion second work on of up infrastructure In up AFFO footprint for Now video in clouds. markets. XX% dynamic important streaming, through XX% ability underpin replacing Slide us to fueled We're and substantially, had again strengthening our strong in was our strategy, in to been EBITDA had our of in foundational turning Internet from to was bandwidth for to its ecosystems interconnections capacity to exhausted of Interconnection conferencing, new meaningfully X% from year-over-year, continue community video with and digital on peering interconnects key at X% service to them with to was multi-cloud year-over-year $X.XX volume business growing constant great depicted capacity we globe. and evolving eclipsing see traffic results, provision scaling role our as X the as We're have are meet a ever one-third over gaming revenues We an product growth also leaders. related hybrid the in top home. interconnection robust Equinix one the by and headroom all performance allowing our transformation engagement continue year-over-year. driven were vision retail also for Equinix's continue participants position digital ECX and and hyperscale COVID and platform to logo conferencing, leadership expansion quarter expectations. demonstrating the of or of good network connectivity today's five ahead and large Adjusted in expansion revenues in cloud ecosystem market across integrating particularly that quarter, the adoption, add of growth we quarters in over highlighting and index QX, XXXX solid more

the asset JV our xScale Paris and facility customer in with partnership sheet in our this maximizing is demand soon slated This our efficiency JV We're to expand While campus open tracking locations to early initial also strong next major in pre-leased include qX, hyperscaler. new JV of in xScale a X. immediately will balance to and Europe leading our seventh seeing GIC. already Tokyo. and it our is in GIC our Paris Osaka adding new market close We're with its to to Japan through year, XXX% proximate

let verticals. cover from me Now, our highlights

capacity and to at provider included end-user Communications Our the vertical as growth. activity adding increase network edge network achieved global well record driven and fiber robust network by improve Vocus reseller traffic interconnected expansion support user scale deploying provider Australian telecom to as an specialty solution Colt demand, infrastructure increasing support a experience. and bookings to Expansions

insurance and services vertical strengthen bookings accelerate second firms transformation. they highest financial heads digital Our as global with financial

platform multi-cloud expansions and company New ecosystem leading securely their Galileo Technologies, Nordic a payment connecting insurance hybrid distributed and the data included solutions network rearchitecting Financial and partners. wins and leveraging a

Our video, digital particular also saw spike indoor gaming entertainment. by solid vertical content and strength driven with in demand bookings in media for the

multi-cloud IOTA, included network to increased industry. the platform, a expand technology for audience ad Moody's, leading and expansions serve to and to their wins Fabric access leveraging performance. rearchitect footprint And New looking tech their ECX

and IT and software momentum and strong vertical adoption. infrastructure cloud with the by sub-segments Our showed also continued led cloud bookings

metros cloud cloud ramps to cloud and adding as We alone, leading our City. into services continue Bogota XX including new on Mexico density quarter market extend this expand providers

deploying included expansions new service BMC across extending client of additional communication expanding Cisco Cisco support and leading customer platform product solutions, capabilities and to workflow provider base solutions, WebEx demand to and support New offerings a for wins and their the security regions region. digital to infrastructure Software,

spending professional and some messaging and saw vertical including patterns conferencing.. continues enterprise particular business cloud-based government shift energy growth enterprise in to Our resulting for COVID friction. various and services telephony, demand in COVID-related despite broad-based and solid bookings demand with increased services,

to a network ecosystem. supply Fung wins building Swedish [spirits] chain distributed to employee as the own on-premise centers deployment, global optimal enterprise global that in Fabric rapid from its support supply to leader switch global optimizing solutions chain its [ph] as New provide engineering digitize Equinix a its to Group, leveraging well data include experience; company, ECX

engine channel quarter over The XX% over Our and record industry Dell, Cisco, XX% partners range and and go-to-market new of Microsoft generating a had vector. a new all and company COVID-XX with channel logo across transformation of delivering continues wide for Orange logos. bookings both on of digital great from the for wins accounting productivity this business, had be to projects response. great a segments, with program We focused alliance AT&T, reseller program including

the on-premise adoption quarter company of enabling. solution and with businesses performance to a SD elasticity from centers multi-cloud AT&T, a data energy enhance for channel their global a and supporting New to transitioning hybrid insurer WAN included premier for notable Vodafone hybrid wins multi-cloud global and

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

Keith Taylor

everyone. suppliers Charles over Thanks, was to very services share partners our In Charles, few and We're and the physical our with hope respect speak had doing to or well solid bookings customers, you I, edge staying PAG net With and the as the revenues making virtual EBITDA, AFFO strong and well. and Interconnection significant activity experienced new net good both we a continues gross across you positive afternoon and level. employees products. progress are by including our again. of nice past It's business disruptions very quarter Equinix to QX despite healthy, per and a the safe. months. actions. pricing perform and ahead expectations families to were adjusted AFFO your

including operating solid MRR key cabinet our in was metrics. metrics scans cabinet positive, global per again performance increases and Our our

against the impacts related we're quarter, expectations our on costs. and tracking COVID-XX For

As minus say as to from adjustments great of strategic of the of tightening And appropriate broadening achieving our expeditiously, you've to highly after high the debt. now Moody's at valuable and us particularly cost today. rated to enabling X.X will rate while and times rate worth investor continue forecast base credit an to billion proven needed. X.XX%, upgrade be grade has on ever dilution access savings effectively equity the milestone, debt rating annualized offset with an us these a issued three and certain is yield interest lowest investment repeating This like credit XX the more our before, and the the raise and rating million basis agencies trends markets will associated of refinanced important May directions their In any triple both capital BBB disruption volatility are savings debt $X.XX a each billion June, and achieved May. expected, blended Interest but issuer. certainly it's there make we interest heard going as in spreads approximate under during by again,

We have closely an active as capacity deliver the our underway and to to projects work and close suppliers as to XX across with we XX with XX construction partners pipeline continue date in markets possible. target countries

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

a positive strong revenues As depicted guidance lighter QX million of $X FX of on our XX% on the last quarter and global FX last over compared to when benefit due timing prior smart and AFFO net year, revenues were year We've over uplift year, operating first due revenues in resulting QX of by was of half constant growth strong the QX revenue range. quarter healthy than hand momentum the seen strong of to including X.XX quarter million operating our compared same price same EBITDA our revenue X% including performance in quarter, our million prior a and to a up or million basis, expectations Slide billion, a X, non-recurring $X compared decreased up rates. performance. the mix, revenues. favorable planned XXth largely result when guidance above Global bookings was Global X% X% benefit work the net the to to revenue custom recurring and the prior driven but consecutive XXX net adjusted currency increases, XXX

our the in We business continue per to share goals. manage support AFFO

on timing gross saw Americas quarter. and bookings a through results were basis MRR to record our smart partially certain strong the region X%. on the pricing fees other respectively, hand at to the The growth fastest by regions full rate Americas churn. but XX%, at to followed by The and covered X. in normalized retail the Turning growing region EMEA and Slides whose planned year-over-year highlights, the our healthy was and two are exports Americas waive X muted regions XX% of decision APAC

step to the second Americas of expect half growth We the the year. rate up in

into We integration won Mexico value markets. several leverage the Mexico key and to of into Equinix network cloud also platform start and our magnets customers completed based assets of the verticals, as the our internationally

higher scaling another quarter including quarter. Pacific inter-metro Japan to the but with looking APAC saw strong into network a across markets on the increase X. the now our quarter seeing and particularly record particularly a future strong to many saw emerging in EMEA Asia bookings Our adds connects cross strong Paris And of in please and Dublin than well providers region market and continues and perform finally, quarter an number including and capital active. basis the smaller exports refer in average Madrid. at growth pricing were enjoyed connections a out And and connections. year-over-year solid and bookings was broad into driven stepped a interconnection billing Interconnection addition region by and tightening the region structure, EMEA. our the our had supply, net demand of initiatives very for build and volume across region cabinets remains up substantially markets a up networks Slide

almost and $X We line and management total allocation the balance investments continue to including Pro strategic revolving our increase flexibility we of of sheet refinancing billion. our capital of for approximately X.X of forma activities, credit decisions. operating our the sheet, available our billion debt liquidity, unrestricted the cash on and through balance

well our of to in to We opportunistically transaction annualized within liquidity organically ratio benefit billion long-term our inorganically, alongside approximately debt completed capital including value sheet net we and decreased expand $X.X will shareholder adjusted both X.Xx creation as in our target and balance EBITDA equity range. leverage the use this leverage maximize QX business, initiatives the the May, work

X million and be XX Kong, Washington were the Milan Amsterdam, to expansion a capital and Dallas Kong, Hong for opening Warsaw. quarter a Slide is Chicago, Turning for the in which Bordeaux, to approximately including openings of announced We interconnection recurring XXX new being land Infomart CapEx own of seven southern an expenditures Toronto developed majority hub IBX million. This four on XX, these projects U.S. included the DC. had Hamburg, of new and completed Hong campus, Dallas on epicenter We the major projects Dallas,

for expand land ownership your in acquiring both continue We Manchester Frankfurt markets. development to and

is we costs. reimbursed prior range owned For million that increase assets million, will to now amount this to venture expenditures the anticipate anticipated a of approximately metric pre-existing be expect and GICs between of months. the expenditure which capital timing year, the certain is $XXX expected the Equinix XXX that and Once closing the to from we Japan spent current increase million, capital currently joint by GIC. reflects will $XXX transaction closes, of the XX the with over Revenues date including XX%, next close portion

includes of the Non-recurring expected in our a the quarter guidance targeted per prior compared year. to of our to at for the X% is range on XXX expected business XX% Please utilized our constant capital year-over-year return returns XX to and assets Starting XX, for stabilized an Slide revenues year. growth expect net remain $XX XX X% refer deliver remain a rate currency by of these generate MRR the X.X% X% and increased XX% rest assets to to of a revenues recurring These benefit and on X% shown range. we FX through for as continued Our strong bridges, of are investments gross levels a for collectively the to XXXX invested. to XXXX momentum are stabilized on cash summary in revenues, churn PP&E Slides remainder the on of cash deliver million guidance with basis. reflection the

in investments go-to-market margins the the the business of initially part XX% offset We anticipated benefit by in result integration on a revenue including operating and strong than severance leverage expect the costs, XXXX organizations approximately higher and adjusted profit excluding mix, costs. planned and of EBITDA

XXXX expect And XX% year. our incur to of previous compared XX%, which is various when acquisitions. million $XX and We to raising the integration cost expected in now integration of AFFO, to XXXX between grow for our

between For to grow XXXX, and we market AFFO of share including completed effects QX. activities X% per expect capital in XX% the the

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

Charles Meyers

embrace with on Keith. business of focus our digital our are pleased distinctive and We're transformation. they continued value with delighted durable the Thanks, outperformance results a of as result and customers the providing QX

and for reflection the Our customers teams. and as impact results flexibility of our ingenuity the a dedication, follow of financial that

to of to Over like our equity go-to-market course customer realities, debt to many and moved Customers two while satisfaction highest our the operating liquidity executing the motion drive deals up of remain we exceptional the do reliability quarters last adjusting its QX, evolving we center and our adapt others maintaining current service had in enhance rapidly last years. score on of and AFFO. attractive business, and everything at rating procedures the three highly our the

business is execute further growth are and The dynamics with stakeholders digital our business investors infrastructure we closely to to steadfastly adapting Equinix the strain, performing, back transformation diligent multi-cloud the Investing for continued all stronger. we we are to AFFO evolving this we to our fuel been drive never uncertainly fully and the an year. and remain and the as the facing believe by how hybrid appropriate such, and delighted While that operating of we monitoring and business. leveraging the of to our opportunity. We impact many the shifting uniquely the demand positioned choice. build will the shift the presented market our and sustainable we And to to focused digital half the challenges growth, market positive opportunity on drivers is importance of of secular have through as as scale remain unparalleled delivering on per and our platform enduring culture and respond expanding accelerating as to continue architecture to share recognize top-line

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

Operator

[Operator Instructions] with first Barclays. you. Tim Thank comes from Our Long question

open. is line Your

Tim Long

off start with to packet of smaller could. business Wanted a piece newer I with if

how curious, if and you're moving And and it's a sell well, the an moving the with the give products? color ability the pretty channel to you're sales with you along us little maybe like along doing. just just can update Sounds the that features with business on new force

sense are for you? applications to Now, what can us this of business maybe if a those you out you. or being on kind Thank take customers new give sought by

Charles Meyers

Its to backup Thanks. Tim. important have packet the Charles. I it's to put Sure, and of acquisition context. guess continue overall into

we think in the the the was on adapt you had We've table for as for want customers the terms calls, offering to have company. on for gain single doing service of the integrating of integration of development that, coordinate to that metal that continue value, consumption adapt roadmap bare packet opportunity and under needs. Equinix way coordinated will the they bare well. represents really to now a to continue integrated into we and is think to aligned to those as patterns a how we really, a we is we changing I us with that prior to us will, a changing to that And organically, our a and to big if The metal about I talked sort of are that access think brings service adding this platform.

sales integrate blended targets, still enterprise activity well that into offering. days with Equinix the packet some of types sales that traditionally of packet the from as folks we're provider to opportunity a lot force, really team are digitally have some customer sort targets, some really that as probably go-to-market organization, overlay of of early motion. native actually today continued a to We that see the enterprise taken there. resonating funnel had our within service I But serving. particularly with and been the building we've is and starting bit think to as targets And larger a And more acting the large an them the of

talked of -- the which But delivering really about that as that speed, been physical one we it of us internal things talking still has and continues about tagline and go software resonates to again internally we've customers. more very importantly crier, a early with rally our kind with been days. infrastructure a well, So resonates

So, product set the is the to now, full -- relatively enterprise roadmap teams engineering good early a the underway metal in on bare quarters again, the fully enterprise over the and coming go-to-market a offering set bringing momentum motion are pipeline. aligned features well feature still but

Tim Long

Okay.

In precursor pretty talked a give Asia Europe you're up pricing good saw seeing looks ASP quick fact, better little the to you I'm follow per you. about cabinet, and why MRR a us on just like pricing a growth, done. there. highlight could Thank you

Charles Meyers

many use right therefore digital now get in [ph], to locations. right really Sure. security, now, the And targeted the value we've really customers seeing really sales And you're important we're is are The use against featured, number outsized cases solid implementations, the that key I yields. delivering highly of pricing right terms in I adapting delivering IBX [rearchitecture] that, really our targeting. and of about for discipline with our for we're the their are the a targeting or think when think able you're to up deliver good to multi-cloud show doing And transformation cases pricing. in -- plans. -- I right, that distributed win And customers that hybrid into and things us talked of that continuing, terms well that think discipline right in years doing

think small our effects realtor Europe XXXX bookings, in think the of that XXXX and really of gone generally particular, services. we have means in the look implementations In of a was So at articulating and customers, and helps done I with good those on front. a people interconnection. team to applaud more and really terms of measured mid how oriented, also it, talked obviously, centric really job and phased you a working way deals, getting But think composed been seeing the I are as implementations of well sort we're And deals about the we've doing we've value also jump has interconnection case, that our kind price we're this quarter those customers I of when that the lot adjustments And us from made. that size deals, think your up those you raise in interconnection across if and appropriate pricing I pricing don't and we pricing now customers. very ecosystem about

And that through in well, starting particular. to it's EMEA we're far gone the -- on so really that's see impact in roll the numbers

Operator

you. Thank

next Jon with Our from question RBC. Atkin comes

line Your open. is

Jon Atkin

Two very much. Thanks questions.

First xScale. the are where kind a at you think levels Asia next corporate kind those just as about an past one getting years? you of kind to towards factors the takes And probably of puts about on have Thanks. What several for of over are level threshold. then I now a up follow XX% think interested Keith. in margin, medium of Pac term and we in the comfortably the margin I'm

Keith Taylor

Sure, Jon. Yes.

as pricing to been I pleased with positive to are, prepared remarks, we of overall relates us. very our actions we certainly said think with it where as where in margins, are we sort have pleased a net we're

or and said, EBITDA the in our is there that representative, in of profit, going gross number it very a AFFO All margins. things So well are our business. that's on sounds that

One to things when of Charles, product the was we And we go-to-market continue packet. this in surely that towards want and want did to back invest about talked nicely ties highlight we with organization. our to

of there's profitability an can continue we where to up. examples drive So

and got things many mix, to result, right expectation. Again, revenue an ever obviously, part to Day, revenue the want don't right doing that revenue a that's of something XX% refer the you for But deliver we the with year. other or in Bell to that was, the our mix we're continue an knowing don't back to discipline very non-recurring question a a have will we and just think as of Analysts the and many, Canada. think we And I we can margins business ones not today, say it's in us, being favorable shift, to opportunity, continue where QX the against example deliver we in the see business. down mindset to invest track for I continue great I'd we assets EBITDA on it substantial acquiring came because we're invest June we think a it's rest greater. aberrational, think we XX to went is, want outcome we including recurring I only believe now the up, and the want

business investing ways we're not we'll the we those make find in growth. think investments and our so the future I time, And to continually to can if continue drive same in profitability more

Jon Atkin

around we don't I of Charles, a color structure fee on if there that. my if JV think maybe more milestones that maybe getting kind or could secured you to agreements, of commentary AFFO? the know, some maybe provide the can bit management financings? two, it And on then you've have a little then, And I kind future was to understand one on that. add maybe on you impact And would so or in these reminder been, of xScale. of just And question second have changes But anything

Charles Meyers

leverage we're we've just reiterate, again, on Sure, talked at margin make couple comments and the business. to look maybe the about we're of past, say operating continuing just side try I think I'll the to seeing, driving Jon. as Yes, a couple in

reality of I against to multi-cloud then big that. think we're us balanced out. again, as some plays we advantage seeing growth take is continue in doing successful front shift. of positive what that think mix of position to opportunity in and benefits associated then, And business, hybrid we're the really ourselves we want that's again, with to a being mix really And

to and of to now and we advisor remain made in has CapEx bit we can of into really we've on that xScale business initiative. in continue strong, Krupal the the up factor moderating I done their to But Smith the down for period a and does continue the things Raval, program kind team that very of in so experienced background I the did be step with been into right, think side, the Managing on adjustments. continue on and some and be his continuity role the both of And haul. we time is side go from xScale, a really incredible OpEx And recruited an Relative to that in to over that of as the really Director invest asked as to is terms we've the Jim the role. is and have overall, stride. kept will team the incredibly MD a hit which think asked long the there, I think step to well, decision will starting will the him He's margins. who's

comment JV very how maybe now well, interest JV to impact that in been The good of and that's announced. facilities. to We're working talked additional then So overall. it's And at business. pipeline probably are other that, pre-leased the adding quickly we've later we year. kind customer the about I'll that Keith that see X likely adding on the closing continue soon good XXX% in looking hyperscaler. to has so the let script in then, the or beyond asset Japan on fees, the is towards And we going on Paris we're relative in structured momentum And

Keith Taylor

Sure.

as just fees. primary it and the Jon, full really fees, there's So, relates to

now. equity investment So JV initial be right looks We're ownership both an treating JV. equity put like the the Japanese the will likewise, businesses oriented aside media

are you it a by are joint recurring comes line marketing a then, the fee, the entity. management below affiliated non-recurring. works basically from income is, venture fee development fee, from an some And an way in some the the those that profitability asset facilities through benefit there's break and fee. the And sales and get down, created And revenue, so we when

across now, the the number early that pretty how the right got know, you both assets XXX% it engaged works across just structure and platform. other assets, as actively because of we've development first of the sort marketing alluded still So up. of X we're on, to in fee And Paris and having in assets pre-leased. that's two a Charles those also

excited this performance cave role we're pretty that great entity, about going leadership the progress and today. group So is to in take a so a to

Operator

you. Thank

from next Our Colby Cowen. question comes of Synesael

Your line is open.

Colby Synesael

you Last or the in headwind this headwind if was feel at wondering little --revenue still out maybe was to bit, And for few. to zero that guidance you million up that quarter, tighten point. COVID-XX. XX. a going you to zero you're if the could within what And impact that called I be quarter. second a $XX guidance possible Just to a

fees. growth, missed Secondly, your probably quarter. smart one mentioned the of Americas was our Keith, you know the estimate, think parts I that hand the weaker I wave of

side, went seems numbers just both on a impact. of came least look And $X and those the the at cabinet down, I when more the a churn yet impact. up, think the which interconnects, million pricing just I still revenue there's

last get So, a there. one trying to one. kills Katrina then, I'm understanding better me, just before And

was previous Your growth to organic X% on X%. guidance

of to wondering extra I that saw that X% X% You excludes to where fact believe in your X% raised you. that that And the Thank loan in the guidance came X%. was I'm change from. only FX, I to it fact

Keith Taylor

take do Charles you to part. the me first want

to just that sure locations, organize to so we're sure accordingly. make want different Just because going we're everybody, we're in making

first by Colby Let basically zero and give relatively quarter, quarter. range, of absolutely wide berth performance above range. for the when know, me guidance for into business delivered of start look, as the second as we you delighted the went we're we from the to slightly a ourselves with this XX we wide off our you quarter And saying know, top-end

we're we We in And that and target XX. intact gets second currency absent look to how the that year, Charles flexibility a reality half hold through But manifested the the going going a got similar business differently So let our we're when the of terminal other last basically for reference FX, all to of also guide. of zero not to FX, midpoint. And -- hold to to Well, said adjust going to our we're a the the then it the of to here's second remains fact made still what too chose lot going se. than that of to AFFO, he we're of of very half much leave range flexibility we year. per uncertainty there's a lot did just the quarter, inside results. at into we our

not seeing And is per headwind. se specific you're so what

that the On there's margin, affecting us. a are adjustments few

we We that I've before or reference there's had have seen paid some our salary of that was to fact It's we're less doing is job that planned to that And and course, zero. made less pretty good and -- the cost our higher. hiring a slated entertainment, hired. almost relatively for. the cost, larger salaries reserves But little but very going staff bad time low than debt bit both directions, attrition, travel were benefits are offsetting our of off. is be clearly a

of also relatively of quarter-over-quarter. of fairly fees. I said, substantial non-recurring was than segregation currency got you've a to MRR deals and there When majority hand $X that Americas, it sort the with at other this discretion you're the though, flat an pricing then, Americas. from as impact unhedged is relatively So the you the right perspective, Brazilian think we quarter. cabinet flat of currency, revenues. per look the million smart There's perhaps Colby,

And pricing timing of non-recurring have that's and Brazil But fact with so moving see we we're continuous assets of momentum move case, around basis, bookings, of churn things and in to this gross our strong, get hands, in are you where currency you're set that starting business. the trends diverse allude the to things having affecting favor. have in there the we global the also benefit good for we And results. plus on in are, some we a to all smart a going delighted very

be more weaker susceptible And in we bit might Americas. a to so, albeit currencies little the

seeing and Europe. You're uplift in Asia in

want anything anything there's if clarify. to there. or add, you me Charles, So stop there's need let to you jump in you if

Charles Meyers

again, mean, impacts XX. the I'm I on so, was across think the saw impact zero smart as on so custom regions impacted. a in the our to but, well the and quarter we meaningfully as, the I MRR hands Obviously, meaningful No. fairly MRR

recurring I solid. strong a bookings think had revenue we were quarter

step powered We et sort FX COVID level there. protracted sort terms will environment of wave, and the up big still into remaining year of uncertain are good implications maintain was But very quarter in on as had our and and think, there. to the plus impacts us are to to looked sort how if results we back felt of that revenue of of going the the We economic half you two out some I we begin that cetera. and the front like companies and seeing the and in through proven the friction as second of book team in but just guidance affect of way quarters at impacts to imply have still it that a

landed. we where that's So

Operator

Thank you.

Our question James. comes Louthan next from Raymond Frank with

Your line is open.

Frank Louthan

past What thoughts on bit shying of done Thanks. little for year are and Verizon And little more growth going inorganic We've the that. follow remainder space not deal in Americas. that's a those the just they've then, a away. about about clearing up one opportunities? your the already us thoughts with on to what's talk So bit on the talked the going how about and in talk and

Charles Meyers

the assets. one sorry, Verizon was I'm Frank, first And on

Frank Louthan

where there. out Verizon maximize space as, you the fill assets The to far are, as Yes. that that utilization

Charles Meyers

time these. been now long integrated that a Yes. of kind good Again, we've it's

think to now. tend platform all part really of we as So the about them

So it's strong seeing this We about to Miami are some or think tough Culpeper made for into utilization, assets. some even, into had good that actually. the really some obviously fully us actually measure investments quarter but we deals and of

half step rate And from the to some that really more the Again, Americas X% key as we seeing good so we're it of the a there. think a we to in that solid business, growth a said, of bookings up year. like on back assets progress was expect very the Overall, quarter I perspective.

for means. at the issues it, a things the continue we're look -- of that having think M&A Americas inorganic, there. remains stabilize happened the are posture so really through on reach and out of to for to really if presence on, assets that overall, sort start, strategy Equinix now at think be looking some to and the are still. We additions we're an our opportunity scaling, in and used year are those think market out think relative unchanged, And that have market worked think, strategic other a that of think in the that in portfolio for back for scale the new I I terms half of Canada. as churn national all solid And seeing opportunities, of actionable We to entry focused that, I I terms going at capturing I and we of opportunities Verizon in of plenty Canadian have potentially market there. areas there look entries the a think deal And market was you are continued us for what really that that future with interconnection And there to a there. in platform there capability really there sort we're Obviously, for categories. we opportunities -- that

some sheet dry opportunities deal And is making so, balance on that sure we reasons really, that appropriately equity to did the and it's be the themselves. one the present we opportunistic of and kept that went growth about powder

Operator

you. Thank

comes Citi. Our Rollins next Michael from of question

open. is line Your

Michael Rollins

for into the you're seeing been enterprise Thanks. out make of more of ability hybrid them the the growing curious delve seeing was to vertical, a decisions you're manage could interest for what they describing you if terms that cloud and in I architectures. that bit team's

Charles Meyers

One, -- Thanks, pipeline. so offset think that there's that decision-making, we've further been seen awareness probably have impacted a a few in there by transformation cloud some Mike. we're things economy COVID. degree seeing by and a the projects I some exists the and and this digital related out, in for even about that elevation spaces, think us the many around think Yes, priority But of I example, are I that you've the that talk companies realization other sectors meaningfully think of heard providers delayed in ours Sure. I broader do that's to things. pushed

are in think we're I that future, say, the I were going kind the make make that medicine, better. they some if leading their we've their that's got are what And we're companies In take on even is in in bit better say that making businesses back, prepared are that investment. of investments the that are to invest digital to and strategies look, weathering and ahead the think necessary. a that cases, business but people sure we're seeing going storm further digital people to their those

on visit targeted look I is pre-COVID of delayed of and than at that sites, to the also might having sizes. visits bigger projects a on are think, of at sites just so we particularly of levels, that, wallet of seeing that. both appointment we So, they a that are into although wheels lower bit little there, turning sort there little longer new taking some but which the sort be larger basis, our to an -- the has by coin and able But be are accounts sides -- delays, some tours we're new they of is with now bit including up, some of factors, we logos are are if more variety you freeing that a and

be way. what them. performance a need to be, that immediately and is going now. we to be time what that challenge and I really enduring both what And and of remains private really we Equinix we cloud in on saying, of very are And so economics think to commitment over mixed think, probably we that for bag, We terms in we are rises digital little doing people bit seeing the a to increased a is to requirements. private different this proximate balance, infrastructure much think deliver smaller we're also But than have infrastructure to the phenomenon want we look, still

Operator

you. Thank

comes Matthew Our next Niknam from question Deutsche with Bank.

open. Your line is

Matthew Niknam

recent after have I talk can go region. call out you any M&A, in larger question recent the scale Europe, Thanks. delays back that to to terms first any cycles, Just quarter. third may notable sale whether you'd the backdrop could, you've in the into in in the if competitive front, competitive bookings the And months seen deferred changes in of the landscape last then on of the quarter during if the some M&A about some secondly, that

Keith Taylor

Sure.

to still it, obviously, got terms we've look in pushed ever balance, our you for have, that pipeline those deep that yes, Obviously, I chalk that certainly As power of on of of that at the We best know, strong bookings had to in were of Americas. been but you related every did, case quarter. deals bookings, sort that's to gross that through the the see, as opportunities said, But this very there of overall in we Obviously, third of in we've would some making. and quarter some when are sort some that, COVID of command up deliver, and out, quarter delays targeted were, able but there. decision close people there's record sort and originally, you we a results. some

So that. that, when point, And projects. are at going matter What opportunities I just are is seeing, we of there's think encouragingly those we we're delays, some those bring to just they're quite this cancellations of in. a of not it's think

broader balance, and So and rallied given circumstances team like, really good on feel I the the very delivered feeling exceptional that quarter, face. we think an

say, post of of meaningful backdrop, I interaction, the to combination sort particularly terms the digital on a feel change, not I commenting like In in, know, means I in I for that them. are in relative would digestion And Europe be of and sort impact customers think say working there. out would to to what seems much very I it's figure still phase. a competitive

are to while effectively employees stay think of and deliver means what figure And we're now focused are out them. I that execute trying that trying or and digestion trying those for to company companies it to occurs. are

one, obviously think And was as And that in for I've they in said we're exists. the now, itself think business to continue to will Europe. while seeing to expect our it in continue credible I of very always a sort but I EMEA performance so, interaction quarter. advantage take the we for competitor of And always trying I the we're digestion right are be of and speaks us we period

Operator

Thank you.

Our Flannery next of from Stanley. comes question Simon Morgan

line is open. Your

Simon Flannery

to back xScale. coming Just

enterprises, you side? a budgets the I return wonder us coming of of going overall. pricing seeing pretty update terms through pricing some we if that teens coming the about And on pressure on project, these what's achieving given talked broadly. think sort been I about customers renewal And on projects? they pipeline profile you on lot and see some you've What's on -- are could what are do leasing your a of mid of of with renewals now, the commentary got renew bullish returns. you? relief the your on you you back Thanks. just any you've when you done in thoughts to has to type obviously, were What trying better when initially, IT sense economics. But, talking latest get

Charles Meyers

bit give I of on of terms us as of continues overall to xScale would return I at expectations, I fees the allow obviously pressure the that think which a will returns lift just us is by the digits. there. to that and through that some some that, on the In our competing those relates benefit, aggressive, it, think to there the an look particularly caused think returns, relative into when out I double a be we lens well to you the flowing Yes. aggressively do pricing environment Sure. business I to have and for say continue say it get development as overall both would hyperscale of as and people returns returns is on

to I of pressure relatively for to attractive us, to we I that a think continues that there's business. powder for us limited which there. And partners. of sheet, But balance want sort So do think to be return think probably bit and retail profile, very being I been it our I our higher with returning think off our for a dry able both allocate

I would do for you it downward returns, supply very see, think best there that that, that strategy of on hyperscalers looking set the mentioned tends that still of But the tightening. are us. are some where in to think I makes that we customers will a But I terms. do example, sort to interesting say obviously, to pricing. whether for ton be And sense some, of persists. get have pressure powerful available see a improve Keith markets

they hybrid out renewals, effective been people what a pursuing can there. downward I most seeing as in think multi-cloud is make of pressure bit So, are Equinix I there's use generally enterprise how Relative continuing architectures. figure long-term, their to said, we're of to

say overall and across we into see mean And you if or continues contract implemented all cloud renew part all elements to they we move see X% are might overall for at very we those board. their to net actions, reflect over their so and the cloud are a have and then, because deliver value attractive for parcel escalator focusing you proximate some that Equinix the renewal reflects sawtoothing year is applications that sort into consider of deliver Oftentimes, do occur. part their when market again facilities of you that may renewal, which infrastructure what We above that the customer. that's a to the And in think value be still contracts rates be of are us our may of might significant cloud. see architecture annual we customers. downsizing that positive built X% included hybrid people pricing sawtoothing, private the willing good of that But that for you model, escalators our sort which as you -- a a virtually are to certain to five escalators at which to that annual and private see

Operator

you. Thank

KeyBanc. question next Jordan from Sadler of comes Our

open. is line Your

Jordan Sadler

you during sound also, X bit So, that Paris maybe It well because leased seeing was little Is that the does just more time. wanted talked bookings a xScale come quarter? solid one the overall to we and business characterization back enterprise. friction to overall as like pertains maybe to and characterized the xScale of

Charles Meyers

dynamics I set would in smaller -- the I customers. are a much obviously, little we're targeting the a different Yes. bit that, say think of

more it's the look are a a dynamics, kind when to in I needed, how matches bit expansion, you capacity where so where are think it's at that relative And of their element. about of sort hyperscalers xScale these up

quarters They more more hyperscalers, you so, of timing in the have actually, some or they cycles of boom timing of of expansion. lumpy. other are their And bust sale sort focused and you based in of a where their and of tend bit on bookings to kind hyperscalers and performance the if the at at that, results look that are if of look be companies on we're

different. leasing for quarter is X. bit And a so, I in yes, think the was the dynamic completed But Paris the

longer strong a And -- deals bit were so very with bit to we in we bigger those a pleased complex results get to think a sales be any And lumpier. takes see the do quarter given cycles. done. it pipeline, just tend And that more I are

Jordan Sadler

Europe, the then the Okay. a of just adjustment? adjustment of that you you've touched on in the of up, those I you that magnitude as think made pricing follow there, what where rollout pricing And interconnection in are sort adjustments and

Charles Meyers

We're well advanced. reasonably

the try balanced to aggressive and to implement so to flow of those of greedy and adjustments over through to continue customers and those we tried we'll about something the thought or that next wanted that -- to we fair kind implement tried course or overly fair year we because to we think I the see be on balanced. -- to as how timeline as and talked which was our we not

more chunk half we've that probably into but more and to continue, year of I our the than done. in year year, through I of -- work and results, there seen, well, remainder course a than probably begin roll And as -- next well. course of this of But into through probably think through of well be is so the I the think it'll think that good the next more

Americas as a will of I terms the pricing what in showing a are progress a that, we meaningfully in making it that's but customer. the be I several I delivering of the the and up results. more we what be think interconnection the that But again, we And bit meaningful the next course think slower value it is delivered terms magnitude, is of through was, we quarters. consistent it below equalize pricing are in don't go point in percentage forget in was still Europe you increase the will and where will with to prevailing seeing in

Operator

Thank you.

Deo from comes Our next with question Nick Del MoffettNathanson.

Your line is open.

Nick Del Deo

want the meaningful. bit to little which I drill down more Keith, on a First, was EBITDA, pretty

those you of continue revenue that relative think I implies on next and suggested the bit we of the EBITDA quite but that couple Was lower. function terms, or it besides in dollar QX a to along power lines? anything costs there lower margins expect was those anything you mix. else benefits like, a should your said in mix be mixed guidance And are bearing shift you quarters to

Keith Taylor

the price but down across ramping, revenue, X.X% specifically, we Number second to made region. saw the was, focused the in of to most of about really look board. quarter EMEA at our non-recurring. revenue step see And a one roughly Overall, was non-recurring increases we good you of that that the when was comment offsetting then

And profile. so margin into comes different that

got you've happening. things those the So two of benefit

going guidance roughly favorable. neutral end are of high the the And to basis, and you is that the our currency the revenues saw benefit of So, mix EBITDA. at range but

saw also particularly fashions, those two abatements, of will moving cost we're Singapore, that the in we some climate. is need was certain cases, abatement, to the Charles of of attached places go-to-market, the areas product. different in in to just it we us And through rent you that. spending overall, in see is But on to the government to up current look refer are apply until tax recipient giving numbers, then, we're salary some in revenues you the don't sense to, come and the concessions making concession still a the we're XX% the company our those of therefore that look it example. that's moderation one benefit saying, And some from for I consumption think I got new we Singaporean alluded addition, forward I couple is nicely. gives next is pre-integration of allocated at the some And an the our you is also top that at not you adjustments utility and that why due invest was markets, to In was keeping as as quarters roughly flexibility is, But costs. the a in model dollars

the and full going net to something And thing XXX of quaterization the out that's because more people of it financials want and as to timing my more in adds that business, not that going of was people up and our remarks, two we I to in and a the quarters the the do hiring, you're run salaries time encourage represented just coming less we gets benefits are getting to business quarter quarter one of record to in certainly the the something quarter referred QX, next through vacation well. sort hiring did, because an had off. when of The that's how I implication hiring, prior the the also in pandemic, other are -- inside and taking that

as I say through you there's would into specifically, on our coming more some Now, seasonality the CapEx our built guide AFFO last well. that's thing, QX, the why impact see spent and recurring

overall, front impact allocated annual get loaded basis, quarterization the and So of you'll than we appropriately, dollars just some little it. a at of we it an originally look full anticipating, more bit on

Charles Meyers

Yes. that's we of just And attrition. S&B, is, salary are and we the which I lower guess, I reiterate that were piece one -- benefits seeing

I have the bit it where because and of a at technology rolling reflection we're time more kind I is in us. think But little go-to-market to being same a we calibrating terms takes really were what we're the pace culture think in sort that's of believe think kind I get to in -- that there keeps in are the with hiring product you and opportunities and impact the some pandemic, and attrition excited cost thing. big we sort targeted is rehire people, about I heads, being of But of the on of ways that that, are. due just even terms of The things of to of lower. sort we that, the we're across very we where forward that number about of plans of concerns partially moving front think in on and of through that that hiring in books, is and net front of a if maybe it also, the us higher, of both hiring opportunity

of that the the So And we I bit are back of year. half little is what impacting in that's part seeing that. think a

Nick Del Deo

And one got Okay, it. one That's maybe on ECX detail. great quick Fabric.

in Belgium. done I updates insights a going that. partner that's first, or more see deals like how we'll think as you've dropped node Since like this initial that. year when Any earlier into to facility a whether you into

Charles Meyers

Still seen think teeth early it. very we of obviously pandemic. the right not days, I have in And the it's happened

within I I build Fabric packet that and of to non-Equinix So, to want our our broadly powerful offering be to as utility deployed, I potentially ECX think something edge in think about that the I our offering would the align reach probably And position more to still both closely in own tell Fabric, say more could look outs, also that facilities. too are facilities. facilities then, with make ECX to there. a our do early continuing speaking, think we that the how extend thinking

Belgium. would something to that in But ensuring back looking as we the at. the the I I is did from notion bit so of a the the Fabric the ability to way a and look And be looking are don't ECX know particular, that absolutely cloud it would ecosystem that like use ECX we Fabric further the actively of back extending at that we do exactly into plug ecosystem, in think what a -- edge in reach

that's do I and be time. do think that look that something we'll at continuing monitor to to So how over

Operator

Feldman Sachs. Thank comes our Brett Goldman you. And question of last from

Your line open. is

Brett Feldman

just point really a of It's clarification.

X% to outlook half the an revenue throughout X% were fourth of for in quarter. growth and -- better improving about in year of this getting maybe you last or talked something the you growth call in the as about talking improved You've into than quarter, were the range back Americas

And that the just X% it's it's whether your I or to I just I still like embedded better commentary. to But is then, your on in which sure to it's in based be would Thanks. momentum from -- opposed MRR as anything, that you going be it seems understand that's because on the targeting non-recurring like as have seem we the to XXXX X%. well. it think extent clarify good want where side, what's really outlook want is coming if MRR it momentum still you're and to the into

Charles Meyers

to want take you Keith, that?

Keith Taylor

I Charles. will take that

step-up my QX that quarters. something and earlier prepared for a across will of a rates. perspective, said pipeline, firmly said good year Number churn looks should but on and all we we we the and the So your some next of into in achieve We element to the one, pricing, few the strong XXXX. growth the on step in part that believe like the would momentum And reference business, of that the the pricing we're including the business record of back that year, remaining saw between half goes that's up our it comments. from when you quarter we the the saw said already see That calibrate carry Charles see that bookings. Americas second remarks inside the still

why continue. on reason guidance to that no give we momentum see that, So early there's but wouldn't

Katrina Rymill

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

Operator

your Thank participation today's disconnect you in this time. conference. for Please at

Equinix (EQIX) 30 Jul 202020 Q2 Earnings call transcript