EQIX - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to the Equinix Third 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 and Sustainability.

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 affected vary forward-looking call. like we get I'd XXXX. remind this identified and involve identified XX, 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 July today's no in not

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

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

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

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

Charles Meyers

key continue to welcome adapt, challenges, and call. changes our been customers and digital economic, selling critical a driver business challenging and across and over year has every afternoon COVID, curating and and enable With as respond shift to unique we our exceptionally priority digital customers strategy Good economic Katrina. business recovery. navigate these an to accelerate a central happening for cultivating This world. transformation, Equinix a all in help find earnings remains health ecosystems third sector to you, Despite has expanding Thank to quarter for XX,XXX the we position our as in that societal operating, our one, accelerated been businesses by and online.

to our respond global driving we we effectively scaling on business. extending remain growth, As disciplined our focused and leadership shifts, these

and our customer responding addressable and remain enhancing that We evolving capabilities positioned we well expand in ensuring ways to our targeted to market, our service the are augmenting portfolio for requirements future.

Platform a October, Equinix We center security the portfolio, extend continue cloud, and of organically to architecture density customers while in the of required global distribute Equinix infrastructure, Canada, to global them to leading the performance giving them to and customers where acquisition allows effectively provider the they businesses. service digital putting as Canada's of and hybrid data interconnecting applications more Canadian range through our Bell national need platform, their and adoption reach richest choice. delivering data, support easily network multi-cloud In our cloud options increasingly of and enhancing customers offering complement closed and both global they positioning the and need. our we connectivity, as to the acquisitions,

centers now center add by largest our platform economies Pan-Indian in Once as one XXth a India, interconnected will for fastest-growing and acquisition Mumbai our announced foundation and expansion. will markets and completed, Equinix. GPX also data of critical served We into the world's data long-awaited serve country entry two the highly

delivery integrated remaining customers remains with increasing reach across revenues lead business continues to This as XX% facilities-based and X% financial a healthy as regions, customers our and quarter-over-quarter to all at unparalleled our from three continues our multi-region XX%. important global Americas combining reach. coverage of ever, Our network, as take regions competitive customers to care. exporting with The from cloud, manufacturing and other drive in differentiation advantage business, systems, revenues to

with XXXX continue pandemic, to our business addressable our business XX We our Fortune depth our quarter-over-quarter. penetration Equinix of accounts top XX% top demonstrates stability the of accounts and the our growth Global the XXX of despite consistent of market deepen their with of over and the the and increasing

and by Green portfolio. innovative recognized our to we recently reach was better consumption received leave energy grow attracts XXXX future, our we XXX% renewable U.S. bond making As EPA, designs September, that mechanism making top Equinix and world our one diverse sure power talent advance it. our increasing as Power development companies our we resource efficiency recognizing from we across offering In award our and our operate technologies, mission nation's than to of and and in green the a issued further also invest Partner commitment to helping a responsibility reflects ensure as Equinix our place contribution the are our meaningfully inspires the continue sustainably in market. that the investing clean for the the we advancing to diverse talent to and and first found of green to business,

quarter. healthy were bookings, and quantity channel results to the to strong These continued our And pricing. another continued quality we pipeline the Turning we close our strong the performance. bookings by and year. strength firm into looks a growth interconnection in environment driven to adapt solid tapping deliver out of as QX, In selling demand engine,

these giving huge superior opportunity significant We drive and serviced and to closing in business with other deal orders of for more creating continue interconnection to digital customers business X,XXX attach a our quantity deals interfaces across to instrument the high X,XXX predictability volumes services. over support rates automate through and quarter than a incremental our

In work up the quarter AFFO was our were favorably. of with ahead XX video continue streaming, interconnects slide again third $X.XX to Internet next and Interconnection home, saw and These rates year-over-year all are the as X,XXX have pricing Turning X% volume year-over-year to over Adjusted interconnections incremental than driven having cloud peak metros a albeit normalized connectivity. XX ecosystems a was our meaningfully and enterprise an over added step-up we more revenues returning by more XX% as basis. up X, revenues exchange to quarter-over-quarter XX% competitors traffic combined from unit and after run over of now trend by results, billion, Fabric customers growth previous X% geographies. We with capacity rate up growth in expectations. rate our across top currency also on normal year-over-year X,XXX constant grew XXX,XXX a verticals great both quarter a depicted year-over-year. million interconnections surge buying the XX,XXX growing. for fueled broad-based QX, revenue quarter. and EBITDA with XX% on of $XXX in had annualized eclipsing and the all Equinix adoption with the

across ecosystem, Osaka to GIC track direct Tokyo progress our capacity take who key capturing extending and assets top full anchor Kong, our We're As São accelerate, a Singapore, final xScale more great Amsterdam, Tokyo. seeing Japan, of the in in to we deployments: cloud on-ramps Silicon leadership the making demand global also signed the Sydney cloud new infrastructure xScale expand close in five locations we our our toppled one give cloud with all tenant in Frankfurt, than other to We've Hong and adding metros the are XX. Equinix clouds strong global business. of XX will continuing for for and new to Phase continues cloud for in in most Tokyo in QX, of D.C., our securing on on-ramps London, markets And Japan any the deal domino our QX Valley, and Chicago, initial European JV provider. JV Paulo, critical nine are first already adoption

maps Equinix helping vision the infrastructure deploy to to place thousands it. into customers. Metal the to enterprises option and quickly despite Platform evolving and choice need significant at during we across road our need infrastructure continue Equinix to Fabric of enterprises our the the of Equinix team a the make challenges integrating is advancing directly of they offering our COVID, And merged our speed Platform a effectively software service digital to enabling XX adapt Packet physical giving on they company. interconnect and new digital integrated it world's Equinix Equinix is Equinix when We our Equinix integrated clouds needs feature-rich bare-metal by early XXXX. and Equinix global Metal an four for plans with automated of customers in to their additional fully metros also infrastructure Metal leaders launched networks platform, our where

our verticals. Now, let me cover highlights from

to of vertical bookings continues Our be foundation best business. achieving its driven carriers digital capacity expanding network for by second the a platform,

with hub a deploying performance, peering Telecommunications, New provider network and British scale. increased to deploying and improve performance; security telcos a Latin network wins Internet included provider a Airtech American fiber local infrastructure Mint Internet, and regional for

had the quarter EMEA by insurance led vertical and a solid Our financial services subsegment.

trading their Exchange wins with expansion commercial solutions. new colocations a Group as a Singapore included New digital subsidiary adding bank, ecosystem, FX simplifying of its Fortune XXX as BidFX, well for

video, in markets catalyzed and saw the Our gaming. to media content and including vertical digital social strength by media virtual, particular shift

New experiences online well enrich the brokerage, wins digital to as included enterprise Rakuten customers. operators Equinix interconnecting customers; as platform global and foundation to real estate as communication its selecting Mobile, our deliver for to an

density with XX% to alone and cloud infrastructure of XXX us continued IT sub-segments significantly to continues and focused We remain accelerate. at cloud cloud Our our our software hybrid strength share this enhancing eight metros. cloud Americas as quarter to market-leading vertical on and in direct or over-index market Equinix bringing on-ramps adoption the in on-ramps in adding cloud

had in and particular vertical enterprise care health another manufacturing. with great strength quarter Our

Maxor companies New Guardant enterprise Services; Health, care well company. health oncology precision wins as leading Technologies; Sandata Pharmacy a included as

allows market wide excited contributing deliver partner expand logos. over and of our to wins and our alliance with and across industry Canada, our Channel all strategic of firm with multicloud as hybrid to both solutions also chain including segments. range continues and to Paulo for assets to deliver for Microsoft, Mexican industry-leading scale. resale to of XXX accounting channel included Zenlayer, program notable partnership over a expansions, to Canadian reseller partners working Bell results wins -- had Canada engage in ecosystem. across the relationships partners the to stronger globally. quarter São XX% new joint joint we're acquired Fortune elasticity Cisco, data Oracle, transitioning are build Bell a channel and for great recently a great generating Alestra upscale Our centers partners Equinix of in XX% efforts on-premise Capgemini WWT in an This this pharma bookings relationship for with new We offers also retail success Other from and

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

Keith Taylor

Thanks well and unique Charles and I your hope to you good afternoon times. during families these are doing everyone.

in team a As deliver. very our challenges continues grateful thankful Equinix is Charles work for XXXX, day leadership the that so XX,XXX to noted, to come and make despite success. employees the Equinix' every to almost

We and have This difference. culture. fabulous a makes team huge a

net a of basis. a than portion Interconnection net savings strong with redemption premiums more Performance we activity financially used significant cabinet raising the virtually it the As AFFO, operating Effectively, attractive into in each positive existing to debt benefited costs refinance of for of value and bookings our We delivered financing interest a billion. positive positive. another quarter issuance ahead MRR had the financials, expectations. towards initiative PAG than was net the and on the the of per year September, range revenues, proceeds this debt again adds debt $X.XX debt our against in offset share higher and our in AFFO resulting targeted third a company. to creating pricing In from unamortized per We with in every actions. remained we end adjusted relates step-ups once EBITDA, entered healthy of our outcome less quarterly present growth three key regions. raise our strong metric another

benchmarks. or sustainability that bonds only benefits wide-reaching new green To-date annualized but exceeds approximately an our customers. gold, ourselves industry. better in our As long-term or also part targets elite, And design framework bar $XXX the also resulted our industry annual to commitment which and not for new power savings to has a communities center raises Equinix' million. This footprint X.XX green green data of better this capital deliver objective continued or we framework inaugural raise, PUE in center we construction refinancing and usage for to effectiveness for average of established environmental the issued our our interest on data finance demonstrating activities

at We have result million almost billion to could of of debt $X.X $XX savings. another in interest current annualized another refinance which rates

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

better and to same As than COVID-related quarters acquisition, XXXX EBITDA timing debt reserves adjusted between customer adjusted quarter for for a pound. collection X% or euro was revenue depicted $X.XX seasonal quarters. the performance; Global of of revenues, net on EBITDA were in to EBITDA over consistent XXst our FX shifting stronger including our last prior a XX% we to strong British prior expected operating guidance favorable was up strong the and and included XX% hedges million QX largely EBITDA the reduction and repairs shift $XXX quarter and QX X% other and normalizing expect FX bad expectations rates year, QX our revenues return Canada to due compared over margins same the spend meaningfully and activities; and quarter one-time four compared benefits quarter due adjusted after our year and million global our given in traditional to consecutive of slide growth. Bell QX Adjusting QX benefit billion, our revenues up QX last the levels. maintenance when a $XX to asset with of between

spend. in QX seasonal EBITDA lower included million higher expense $XXX prior net due AFFO constant rates. and currency benefit net when tax by adjusted a a compared our million on basis FX income to our strong QX expectations offset guidance Our of recurring operating hedges FX largely $X our performance but Global CapEx performance to was part above

our recurring prior quarters. other As typically spend includes quarter QX a compared to higher reminder, our of CapEx any

a some years full whose pricing to on we've our quarter consecutive Canada, five end, The to metros some regions expect the region Americas slides should and on sell quarter quarter the lower of Americas' provider cabinet platform. This our XXX regional Turning churn. the and normalized X%. at stepped to were After through basis this expected. saw XX% year-over-year and we followed customers across the its larger in Americas and fastest-growing covered highlights EMEA of seven. results quarter, which the allocated the and return the while completed and net respectively revenues of second acquired experienced net are seen infrastructure to earlier in as up mix region quarter APAC our XX% next seven of in by adding XX to record in deal healthy Also a experienced gross a in cabinet our we traditional to bookings billing additions we half due expect a levels Canada to power leading new record Americas the data XXXX. density cross-connect remaining of of with asset two to acquisition churn negative quarter other than highest favorable we regions. Bell transaction November, centers largely first exports positioning were assets. footprints the adds several Equinix step-up timing additions to billing in in digital close occurred by new

up due market. pricing We're JV are major with half strong of Japan of finally, being remains the was bookings expansion traction verticals healthy year-over-year basis utilization saw seeing to small with on region's GPX high across initiatives. recurring mix acquisition performance markets. bookings strong in increasing for Interconnection London the our and our IBX and related to led another and new One projects with region to our and Our four constructed Amsterdam logo including Singapore India volume of XX% quarter the asset GIC. projects hyperscale EMEA by markets. deals the region revenues strong early of favorable led in EMEA the both interest the and And a our our Mumbai saw of region customer Asia-Pacific more by pending all with a than EMEA of adds quarter substantially

We Please looking And our structure. expect XXXX. QX X. the in now at to close refer slide acquisition capital GPX to

foundational Our success. $X.X to future cash remains sheet. our on balance sheet quarter ended We the with of unrestricted balance the billion

Our total liquidity included of line our unused credit $X.X billion. of revolving

annualized EBITDA. remains ratio QX Our our X.X net at adjusted debt leverage times

we price raised per $XXX share. net of million XXXX average ATM an quarter equity During $XXX at the program completing of a our

enter billion beyond, from and sell and runs into for and we and $X.X a offer program, we to common corporate of general this our Equinix XXXX capital through XXXX which As complete which stock working intend QX under into year equity purposes. may head ATM time-to-time new

we've is to tool to seek before our attributed to to continually long-term fund capital-raising our program the needs, shareholders. business future And and of equity we'll use various we that ATM stated fund expect debt initiatives. a As maximize to an balance continue our value business an efficient we've to and used

X. to Turning slide

traffic. entry For the We along neutral the with Dubai new projects creating quarter, expenditures of quarter hub million. and into including second CapEx our opened region's approximately in the for including $XX a networks capital were Muscat, recurring million, $XXX Oman subsea three cable

and builds Approximately we markets the projects in expansion Axtel including density for our we development, the XX and land Revenues to ecosystem and to our base. established this to assets projects the our ownership project in the owned is from major acquiring expansion countries, XX leverage XX we where XX added bringing were revenues, Frankfurt the a we Bogotá, including to expect expand XX% following Additionally, Paris. near customer annual in and spend pipeline. QX, installed our land significant of acquisition in new tracking continue metros very to continue strong Mexico XX% across in improve of to first number million And of sheet, our generating total result $XXX going customer over term.

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

acquisition, year-over-year our PP&E summary excluding note Our from to the guidance revenues. by X% please with slide facility, XXX one a through our a return And stabilized collectively increased anticipated bridges. Ottawa stabilized revenues currency utilized XX% in These Do generate XXXX Bell XX refer XX% on XX guidance recurring to close gross for results assets and the Starting are on cash-on-cash and constant assets the invested. QX. includes financial we which Canada expect of the basis.

For Packet the grow early X% to prior range targeted incremental our revenues within and being by assets we and MRR foreign the the timing deferred custom Bell below Equinix slightly normalized acquisition to offset which to benefit $XX prior next will full order our of the year, a be part range we X.X% expected an expect and to currency to million QX. expected on is churn basis, for anticipate move compared year. revenues work, the of which an guidance through in constant currency Canada of includes X%

and margins approximately million through to acquisition of to to We an in We're XX%, prior which adjusted $XX integration expected expect grow assets XXXX. to Bell of the the the excluding FX integration XXXX expected Canada and Canada benefit. million acquisition of EBITDA XXXX currency interest the expect incremental of lower expense. between due assets Also incur XX% expected costs is compared our the we year XX% foreign now raising Bell costs compared previous guidance benefit and an AFFO, to $XX and

now grow per we XXXX, to between expect AFFO For XX%. and XX% share

here let turn that, Charles. and stop call I'll me with to the So, back

Charles Meyers

customers positioned Even transformation agility business the help the noted, very We're And our uncertain critical of we keep times continue sustained quarter. do to our immensely are to performance every to teams Keith business. in in with are everything center advantage. the companies who the scale a results pleased are this create around and world digital embracing digital priority with in and these uniquely and Keith. grateful at we're sector customer Thanks we our as delivering as

strength strong and interconnection of addressable the consistently bookings transformation. digital market in give broad healthy created of us depth digital growth the scale our and ecosystems Our by confidence the

as sustainable We develops customer place our inspires continue to in platform is talent. culture invest our to evolving a future to committing expanding and reach our needs, in a our global that more and to embraces, delivery, accelerate exceptional evolving widely digital attracts, that and response diverse ensuring strategy, recognized

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

Operator

with Thank KeyBanc you. question Instructions] first [Operator Our is Markets. Jordan Sadler from Capital

ahead. You may go

Jordan Sadler

Thank and you afternoon. good

wanted the of you the in for I first just and not any vis-à-vis positioning seeing what in a digital referenced or of ahead the XXXX and seeing whether enterprise So you're your you're your the on of touch evidence in transformation to possible acceleration sort remarks. business release

Charles Meyers

cloud I No of a are of continuing think sort we're of both up adoption Sure. for seeing of the and performance Yes. think and strong the and I as definitely demand see the very in show sort on hybrid choice cloud architecture which the that us from enterprise to we're really of side as we're the and vertical cloud the both of side strong -- ecosystem enterprise. -- supplier sides of multicloud terms enterprise two on

think adoption very what We've think up both well cloud. going their seeing to and invest adapted that. in is and good I light engine, But be a continue virtual approach what terms is are bookings COVID. I've we're go-to-market marketing of, And despite largely to our I now to in And overall ability I cycle. of we continually selling I in generate enterprise selling pick of think terms new to really yes, think pleased our a logos in position been with of continue behind to enterprise so,

there's at of then about now; look we rate I in But with which lot is million the makes add the think of that terms -- platform market run front a to Equinix we if in the think things to opportunity. Network by Edge; evolving which continue we're sales we continued coming. opportunity XX productivity to in going Packet a teams have of look enterprise talked where and we're our of four in you I and with us how think business And at carefully Fabric success more markets adding now look $XXX sense. like

think to expand the are those I enterprises. all proposition opportunities for

Jordan Sadler

point produced factors, about just bunch -- a a just the midpoint of XQ. to is you walk a then smaller think sure the in I magnitude couple the clarity capturing what decline suggests guidance, us puts the for XX% the of at things EBITDA from in just but that? AFFO you of And on of all I terms And sort of what's fourth and But of at know The one guidance want couple sort a on least Keith touched adjusted through there were make could And the a I the maybe I'm quarter implied line decline. at of of driving you it. takes.

Keith Taylor

things meaningfully anything our more themselves I generally have like Like just an QX say you balance mean QX, see in to had as Sure. but in we quarter. you that relative And we we to result And will. to a if goodies overperformed out I'd that excellent guide. can than tended baddies, we had

throw try So to between three then where like really currency. we're again that operating because when you to and the very the for QX. totality and then there's main the it specifically right things so margin We're look want Bell Canada. in at we -- and year QX you you But year, in the add at transaction for be you look and and -- on delighted of let me cost, that accretive put it top on going that relates with as have an we're happened what's perspective

favorables. maintenance we into moving QX. QX million and have deal we and you roughly me was in lighter favorable had let maintenance to QX One, do what areas. and where costs that $XX $XX that quarter I'd three of benefit a from call million we with as got comes There's repairs typically into because more So where of first. moved And planned than we repairs

million swing roughly a $XX there have you So quarter-over-quarter.

second million into some going of and direction And utilities. that does you a purchase to, surprise $X seasonality. relates of our had another we're around in one-off basically and we the the line. sustainable settlements things the There's The energy. indirect But opposite people QX to had with one many no arrangement going favorable rebates I again sort flip where And we Utilities for we utility then our between through think power have call. on move basically lot. other

And we're so, to portion million we had you're the position that be hit a reserves up last million in created. QX we implications and would very the might $X to we took swinging was strong of basically said prepared release business. $XX as in recall $XX And on started a time that a we At there. what about a effectively, year EBITDA. COVID-XX And revenues as on happened thing the very then when the remarks collections I in our that view of you conservative because the negative customer to have very, been basically of million

-- $X moving we're office in one-off as COVID to as a to employees, million return we we QX. six -- $X negative X%. is, had side so And move to and the we with think about and But flip deal the million I a payments benefit

our million of a positive you've sort QX -- So in sudden everything all $XX got it negative summarize a if million, $XX a to net $XX million, from $XX norm, that's of if get I you And margins. once you to in QX return we get that will seasonal QX. to was I we comment in of very back sort going could -- a EBITDA my million for deliberate why

favorability. for went guide then Long-winded got numbers. anticipated as we've a what But a we'd pieces year lot still -- Canada. And of plus Bell see. everything And a it's conservative think quite lot there's for response. again the that. our So of openly I QX moving on from the uptick apologize currency our expectations would and I that's against yet deliver you if

Jordan Sadler

thank Okay, color. Appreciate the all it. for you

Operator

The you. Suisse. Sami with Badri next question from Thank is Crédit

go ahead. may You

Sami Badri

you've creating And much on motion question. much very kind about partners robust lot ago. you of Thank of thought sales and been I to strategy. of trailblazing touch years the formulating new a many wanted channel think obviously I and connections Hi. couple more just really and first a us new for doing a the than of

now to I or this an come it give revenue bit to go on the to with and necessarily complement the there update, specifically sell So, going channel this how more could not lot if selling in you a evolve you years. has understand potentially from could more through essentially channel little you guys Or the partners flowing us want so where was coming next is hoping can we of guys channel continue you with over still strategy more partners, percentage to a be? Just to but how of channel? complement, business are to formulated your

Charles Meyers

question, Sami. answer a is Great think, long I The Yes. is, there to still. short way go

still opportunities bunch I of of a think us. front in are

As ours we a noted really the partners through productivity other and them were VMware -- then partners for this. to that partners a gleaned of cloud you've in But a look of really begrudgingly, complete a you we're the partners on aligned having the people make of that the interest coming probably channel, great choice traditional at more if sell and those they way it probably on that Equinix their we of pretty of you company of a who that we're be was for offering what and but a seeing focused hybrid who've a sophisticated subset think one room value the I really -- there, both might sometimes sometimes as we the -- is partners doing areas see way architecture with on have and what customers. tools who basis. colo own, the bring potential alongside normal in it we with and like can VMware I -- offerings of lot infrastructure our off solution of marrying within of big with bookings you we've have think, but which we made provide cycle their and complementary a think complete then bookings somewhat success where have embraced we brings but more realized then backs and who, in that quite XX% technology that I and But, lot investments through companies can of selling go machine definitely services on -- the like also -- And just there actually selling that could partner A as choice. is tool brought a Equinix weren't -- bit primarily a And really sell-with multicloud where our -- now. selling in who's gone we environment in smaller we terms on significant difference added create sort actually market proposition to think our also have driving Packet. I a partners success that who in quite Metal finding acquired more up that capability

growing of channel So I new of taking opportunity level. there in amount fair terms it think a there's to a and the

Sami Badri

xScale and follow-up just you. the And one then initiatives. JV Thank regarding quick

xScale say new in there where -- America taking into or large had the in is some there India India new a Latin the large You've for in some and or just regions say I deals? both for JV potentially opportunity want sales to GPX clearly and very hyperscale growth announcements high into regions with potential opportunities into motion like pipeline. Is coming

Charles Meyers

of navigate ability to -- our associated we've I with We complexities think Yes. things. comfortable the with these gotten some

which the you extend opportunity us work terms it sort through recall will just we took where But and in that. script directly others there's that for we commented JVs of described. I and all point us who additional of, we either xScale get JVs As effectively. And other includes have in the discussions markets “other of for think JV think work the are could on sheet ways I that do complexities in we this would ability getting that we're leverage some terms think of already middle that financial with down kind think on investments returns fully underway -- well of the that think that them we while also us focus of to the structure in time that using, money" that over really and to markets are the come get give about excited there there's about our will firepower offer people's as runway really us. and on potentially that you balance in more out gain the of that But other partners our a the high-returning a

more that there's I for opportunity do there. think So

be more is look the to the we I additional where I markets near-term think be quarters. going JVs us more that -- and at you'll think that hearing from focus from would on coming about really in

Sami Badri

it. you. Got Thank

Operator

Klein Thank from you. Markets. question BMO Ari Capital The is with next

may ahead. go You

Ari Klein

expectation improvement Thank could performance then was bit? will Maybe the the you a organic address are continue. noted just specifically you. you profile not Can the that And what little quarter. for here? Americas, the improvement Americas viewing drive whether in the in or from that in the something there? And higher unpack you Churn but that's how growth

Charles Meyers

return Sure. But I'll back can X% the Keith you sort we of feel there. maybe that this now. to over towards talked that about growth very business. you're half add the year anything about and the we to good actually want calls you last of look expected about rate a the We that seeing Americas Americas in several start and

that actually than of were thought bit mentioned on that oriented of associated in met Keith terms little both earlier noted in deals As we came But terms done as churn. that deals have came other a a script you churn one larger was wouldn't commercial we two in That in that quarter deployments candidly in was really in have his footprints. focus higher. the one hurdle interconnection ecosystem-centric our really our terms those would of forecasted was

seeing backfill the there can we And business -- negative movement on, get that though think I billable kind showing on with going in -- as were so a of actually that we're that the think we cabs improvement and bookings yields we're churn saw that that facilities deliver impacted. out with right some associated we even to I we're we can find

market. We're there selling other to success the hard market and and seeing to enterprise role using enterprise mature in force market drive the do I regions, more organic very traction good continue working doing. export the there. a that is in definitely by think to which business it's in for is growth our to opportunity also particularly way key us playing very, a So

has grow again more a snapshot nicely. market, think And to pretty quick the the in definitely mature it really So I that's returned Americas.

stabilize continued I see those wouldn't deals were think we we going yield. in are churns to prior. improvements think out targeted we some of I have as that we'll see really come that And

Keith Taylor

And -- necessarily add Charles our of we number have effectively that would ourselves these and made the a just deals Charles MRR comments just increase one -- increase. churned the of done as seen now those actually said reference having Charles deals it that part aren't for couple what reason cabinet you've per what churned I would when it's to add is would fact I to the

its worthy one, mature really that had important is one points Number that's ever. thing quarters with But second The commentary. note market. two of Americas in are dealing our of best were a are we

strong another a that's positive. continues and But So activity the interconnection basis. on exceedingly to be that's net

very And of developed. a and we're being that's services. around our so healthy on you've ecosystem top that products Then investing got new

see time opportunity over attach rate. you only will to also of think acceleration some you're an of a but So that see I period higher going

the And are the thing are make the down my did that a of quarter. the step-up normal some we see for comment real a year. positives negatives we anticipate that I Americas return then so you choppy. coming in a is there been remarks billing road. anticipating are that has next half The prepared It's do meaningful been some despite first to And in but years, the choppy more a of few more next quarter last

Ari Klein

a Thanks. can then bit acquisition. Packet what talk in I expected has guidance on briefly the the the the response metal? to that And address you you customer then maybe lower just that if noted about been if Can growth too. little I been think has just And than you

Charles Meyers

Sure.

that existing to previously super of in $XX integrated guided come offer and time positive together. we Metal intentions those really of It's had million. Equinix in a terms fully when artifact frankly of tie we below I'll metal the $XX to period in prior And the acquisition to together our And an we're million a the -- from But Yes, going offer was bet. range. to that early think seek bought I You let that decision customers that our made were as we really the they would in response underway did terms that Packet. an XXXX. little in was first that set on the a in for a had offering. then our bring launch we offering belief when run focusing we organic to of feature Packet we of -- encouraging envisioned kind we us product

then sure perspective. make to but before put we to wood the we had a market the teams so a we bring we the the in behind from terms And together, decided wanted waited we enablement bit arrow offering of in real sales

terms from and to be on we opportunity I far there's really course being where believe to the and expect we run think And over in had resulted Equinix possible it's I think million, bookings the off in in new you the of from it But standpoint. look great of think there. first annualized $XX about that not behind we're what revenue that in so for rate what implies if hoped at the an about slightly deliver QX us as terms that we expectation. markets with a I what is encouragement offering enter getting half And customers too XXXX Metal they of

and that give because what would team to it. primarily we we in we proposition. say We've along I some a really those our little bought and The seen credibility us was very it three has very super dimensions for. turnover of technology that team And all thought is team. the terrific. value hoped We business been good to about additive market the feel So of in

the really come I They've optimistic our And market. the Metal together cultural Equinix engineering an great going with team forward. to very a very successful think think that's about be fit. they're path I feel offer we develop in to

Ari Klein

Thanks. color. the Appreciate

Charles Meyers

You bet.

Operator

question next with The Michael you. Rollins Thank is Citi. from

ahead. go may You

Michael Rollins

into balancing process to line thinking as us about curious if the goals top growth you're margin get give how getting just the you're was preview company's on XXXX I long-term budgeting you with could a strength above level XX%. nonrecurring in quarter, And you how and curious the think some year-over-year sequentially going that then secondly if in I about can to the forward? was and of just revenue unpack

Charles Meyers

I'll Keith the Sure. maybe take one. first

the one that You if second works. on can comment

that. drive will can we're long-term want old to too. our same I But song years us service leverage that be think we does from asking add the creation a heard market and on believe and you've is our and and differentiation expansion. you margin budget well to underway operating anything are a customers investment. that But Mike do it's over evolve of the and the -- on on we business do have -- platform that into dance offerings want kind objective if We maximize which to the value continue You think long-term we this you really to will is that our leverage And opportunity focus our to and require as we on that. converting also our think about our continuing what And that for. require significant to adaptive I

continue that want that XX% achievable long-term where target And we believe an and can. so, to is to expansion we margin drive we

give to in you the mature that automation very operate And of focused and platform to EBITDA we'll drop make to further if additional and And we'll line and performance at versus that trade-off, to bottom that to investments sort be our doing on look that drive at achieve. in like automation. ought markets when we're investing we in some and the expansion -- think able and operating then services putting to I things margin it's the operating adding we the trying leverage. something levels

the for back with but that journey in And continue I that it business. a we to say as the still think lose operating that And to obviously and align do approach clarity to don't that would going sight take balance do for I us. think come would we'll believe is need So of more importance But we it's to of on that. mistake I to we you opportunity such be that make sure be we -- the also not invest is we ought leverage. a the to us I my

Keith Taylor

Michael, we relates revenues the And came so it question second to X.X% from as this our roughly of quarter nonrecurring. -- did

as step-up In fact the over a you meaningful note that was the quarter. over year also prior prior and

is X% deferred little assumption expectation. vis-à-vis in that next than do that somewhere the full it's reasonable We'll the when that it's and a guide it -- not actually that year. for And assume meaningfully And -- it's were a update think revenues. reasons We we'd on year. average thought annual more than to meaningful custom company make actually the a quarter again, quarter all and we comment from I to nonrecurring here. this a revenue February. between for But did the less work fact, we I year-to-date not our different a the all X.X% said X.X% reasonable nonrecurring do certainly first anticipated. give -- that's In last it's is year it's we that relatively for departure we where million we push we $X of fair into as part $X a did likely million to will did make That

we're about XXXX. million year-to-date year-to-date $XXX million in I So last we're I about $XXX think this $XXX point year. think million At

and I'm in accordingly. to of sort then range we'll the update comfortable X.X% again, that So X%

Michael Rollins

little to Keith, you they your past? -- Just what the is what's under more happening what And terms if can they you that that just representative tied activity Smart the this more unpack installations describe to you're processing? installation or the business in need understand and to your of can't of some is of dollars a just those need can your than in get and normal-course customers curious they Hands is. your this services did Or facilities

Keith Taylor

that in number Yes things certainly a particular on There's sure. of go that line.

First certainly, drag-along every that there's sale the is make. realize revenue a course, with and deferred there effect. we foremost we And installation of that

-- For book that there's every we well. MRR dollar dollar we NRR an as

the customer goods contract. -- there looking work who's perhaps well. a think that that or you a in for over we defer times there's custom are so And environment. build-out a that hyperscaler at -- basically There's as of of about resale. relationship to for a that And addition Then large their large large do

for of work a bit be bit we be can and as it do And we the that so a result do fair some lumpy. little And work the customer. custom installation work particularly it'd a for of the cabling hyperscalers. and And

some good that in line. It the business it So revenue work. on our servers effectively varies And workforce. do into in XX% again line of all but it's to -- go their racks in move But XX% they're their for in XX% equipment margins. cases margin return. nonrecurring roughly And we use and put they Again we a us. or appears of great their own line that's to a the business generates prep

Michael Rollins

Thanks.

Operator

Synesael The you. with question Cowen. Colby is Thank from next

ahead. go may You

Colby Synesael

Great.

few a questions. numbers-oriented Just

make First to off the point. just

seasonality. our should correct considerations quarter if modeling that we first to when $XX like Is we're EBITDA correct? XXXX back adding other in be million taking million So before $XX to I'm the

Keith Taylor

also FICA reset certainly our as the QX there's -- we have the we have Colby know annual conference. the in take away aspects -- say You seasonal and you sales

it suffice say a you're would sense million that back numbers. and to sort investment So, million to give to to comments any $XX about absent seasonal the wanted margins. But traditional if of you of $XX I That out we'd that say over years. you that -- XX% is Charles' put anywhere QX there why few come XX% the make from ranged given talking that's to that has aside last to

Colby Synesael

we And into add the number. Great. the first then it -- fourth quarter into back

Keith Taylor

Yes.

Colby Synesael

of secondly, revenue gave XXXX each gave and share. you guys at X% year AFFO in XX% your guidance to XX% per back guidance XXXX. Okay. for through X% you And then Analyst Day And to that

Curious of Day in are Is to year, this you of year-to-date thinking two earlier is you I how that of in question in COVID-XX. XXXX Analyst the quarter? June been to back you. one in have fourth this the an the in and Thank gave guidance didn't. have $X It there, just year you $XX business impact could think years. guidance terms sneak that terms we normally where valid? of still but then extra what impact actual You gave from would the for million And for every if

Keith Taylor

do Charles, want you Or... me to those? take

Charles Meyers

there there. there's Yes, a we you few where I'll don't jump ahead in and of and why them you want -- Why go add. don't

Keith Taylor

Well around as X% those the Analyst we've And Okay. XX%. in was of we foremost to guide as share it a to very XXXX. to and AFFO activity. well XX% again know, of embarked number June There's upon particularly the Day done relates a Colby first X% against that lot expectations per again you been

we're it suffice acquisitions. And we are year -- normalizing a ahead for to market at what both running And of then so the say, and this time. and we've we good done is the into in point third job a it guess I told we're of that our third, currency for originally well

a very we profitability lot I give it's on that update were relates to that sure But has the make overall, very little the recognize vis-à-vis five time. as ranges basis target feel changed of the that shareholders sort value some it that and a you we've we'll of feel As can that I'm ourselves acquisitions years, business. against sense. per-share a I early good we've we've for probably active including generally then sorry… since made been to deliver and a the giving accordingly good we very delivered. that set to next A But you speaking, we at that about

Colby Synesael

impact COVID-XX guide?

Charles Meyers

Yes. COVID.

Keith Taylor

cost sure wide about know talk targeted on it could we acquisition can were to some a basically bit. think, said all that what then were that you it to us slowed of the Charles as even business? in some $XX to as That for on relates As I set back bit to COVID around that Certainly a Packet going What overall, worried in put as the impact about million QX the right. we payments peel What definitely world. COVID customers things And costs? together relatively down making you see We aside most a a were business the again we incremental certainly midpoint. said receive? and just little we little were go out a range again, of you're that as pull starting a we we difficulty second, not about line. going But the EBITDA there's -- is

For all to going of costs intents $X purposes, in and million another book were we back third in and million of wrote quarter that then QX. the new $X

range sort in I you're net-net of $XX So I that. the good pretty about somewhere And feel say million EBITDA. on would million $XX to

hard to impact There's it relates As it's the from certainly quantify. COVID. line, some top to

And million think, to million $XX how I'd in the size I here's $XX got it range. there. we

And be of have deployments of out very success and absorbing will. on and QX, to particularly For for and will on customers good business to and line. gross that. from -- COVID doing having and had been other has some reasons, some the think we've concessions and fallout in There -- there's made implication, sites things all been so able were also timing gone less we're of being absolutely a getting we've book the I timing number companies There in that. that there implication. QX a difficulties particularly But

probably effect million knock-on revenue number. our and is on at again $XX with line, estimate the share so with our And internally $XX a to Board our again as also the we million

that the we that gives originally first we're paying anticipated absorbed. due you vis-à-vis our things Clearly, be and have started sort all of from could where come are think been guide. exceedingly they that as so and of But Again, we've done we've meaningfully QX customers the concessions there. and I few -- company their absent a started than here has been original the that better delighted running because been with have locking And that's a here we in sense we'll well ranges bills down. we making when what

Charles Meyers

guide of me movement is a that the forward downtick little shift I saying which here is on is apparent on again, really EBITDA up significantly in. Let to of the add backing to terms was that matter QX in that QX performed and think in of which between just One very a pulled over clear, you obviously first all what question we're them. be just the color had just

if that margin roll the then for adjust we continue you with I we more between into take see. you see think would would that's QX to of much you that consistent typically and a sort profile to of kind with of movement and I trajectory smoother expect that sort a what quarters, think

the, clarification, I guess, one. offer on that's that I'd So

investments we've color. the were work putting period putting made also from gave There's of costs to making address our during in are But investments that. back and back terms I a well-being obviously find grow. invest things Keith continues hopefully, But this again multiyear definitely continue are market that this to offer behind that that a In to to of terms we to on there to of And we guide, in going in going a Day provide number we'll and experience see an we're we're good come our continue better. we believe I to -- hard is to employees. way significant of And here for I that. that think Analyst addressable get But year in employee think trade-offs sure there and time, we're some do that think that home then trying continue to opportunity COVID, that. our can

play It's revenue some all of been to the has how the or with into there's team into pandemic. performed to extremely the so that And think happy overall, dollars hit I'd impacts perspective. But hard have put fully you got tell we're -- tough that. I despite

Colby Synesael

you. Thank

Operator

Thank you. next David with The Green is question Guarino from Street.

You may ahead. go

David Guarino

for questions questions. Hi legislative-focused guys. got actually two my for I taking you. Thanks

November, your that increase in bill would on result And of cash just Equinix' first of if would that then percentage what measure also. from in the idea The And any were some what us have one, give could Thanks. you New you the ballot as of the tax with just to a tax remind curious of XX financial the California with property there? tenants, transaction having you started us an I'm conversations be, gross one, Prop in help if your proposed Jersey financial profit second comes could pass? New be Jersey., great

Charles Meyers

Yes.

from you New on deeply And Let then engaged me can you the jump what obviously give one sizing with And add financial And tell little I customers. impacts color the thing. of our on is, a first. potential color. any we're Jersey bit take But Keith Prop second would trading yes, XX. maybe

they going to And resilient. certainly Traditionally need their been would trading in very I as an healthy has you with clear move in important that platforms it to Equinix partnership We -- is globally. one. a And have think to. that those tell response are can a around that I Jersey designed highly that New companies they ecosystem with disaster. be they're to make

respond would consider I disaster them terms of, we to -- them making can there to. partner New effectively. in just think some a business the they support think as continue of tax their run And we're I to would that sure and a Jersey that they

a re-stabilize be would I would that. be terms be movement around But a So in being think in volume think there I impact to I that potential other that -- ecosystem, think the venues. would to it able it of trading

a our I trading to are are And people very that -- in that. realize I not prevail. think wouldn't about think And -- will And And to going outcome. with I we try for. hoped but to had customers. that's heads that aligned we're people so, people make And I think think accomplish personally it a great closely probably what cooler sure clearheaded are -- approach coordinated thinking

Keith Taylor

a as U.S. is pay the I would think a tax, legislative the that all I be corporate And to generally so Charles. and think know we are as don't that and of much it no Equinix in change. we're in -- REIT the what say to front then that -- of I that, not meaningful us Thanks come because foremost tax. REIT, form I outcomes matter around particularly going think we relates of would a matters income first

it's you properties. has As position we be roughly earnings the going close attention XX forward, Prop Charles, this. again, California. I on $XX in think not in the some our the future basically million have very moved range. coming That's XX moved going forward, to tax then, well -- that. paying the could for it's the a But probably the to to Again, quarters, our calls. perspective. we're of know what the on would analyst own though, outcome. to future or our Again potential we'll estimate a transaction some at we least leases If over give number. huge what of it today million of be to triple-net New relates financial be. And $X on accordingly We we'll it update highlighted to Jersey, the XX Prop propositions investors the And estimate --

David Guarino

Thank much. helpful. very you That's Great.

Operator

will I remarks. question. our And for it you. to you, was Thank turn closing Speakers, that last back

Katrina Rymill

for the That the everyone call. call. Thank you QX joining concludes

Operator

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

Equinix (EQIX) 28 Oct 202020 Q3 Earnings call transcript