EQIX - Earnings call transcript Q1 2021

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Operator

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

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

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

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

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

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

Charles Meyers

strong year to a We and in lowest Good quarter first Thank platform, delivering our strongest net business. quarter our continued demand call. by start you, afternoon Katrina. the great earnings in one bookings our in the across years, momentum and had Americas our of fueled our many quarters to welcome churn history,

the the Canada time XX leader Asia all which With the to we market XX three are in this are across the of for we the now Bell spot the now in quarter. leader in be countries of operate. assets, colocation market one number the we in addition And of regions first world, taking delighted retail Pacific the

scale our X,XXX Our bookings performance and of than consistency executing deals go-to-market with engine, X,XXX continues customers. more to the highlight

a have most support one this a We acute robust We XX fully markets build in countries, years our the build in tragic with continued markets key major issue pipeline COVID impacts demand, across including underway around active very ever. XX to Brazil. recognize world, that XX and including remains projects of India

Digital and to go our pandemic colleagues global Equinix positioned. infrastructure expanding in Demand world. I rapidly businesses to and our retail our we we on a remain increasingly clear to hybrid cloud build expected focused pre providers as accelerate, and enterprises this tap to of priorities hearts that as backdrop, support and demand. into as steps service platforms a recognizing communities. a can their delivery pandemic as is are verticals increase and broad their levels strong the toward continues this world, navigate xScale But an Our Against reach digital above of scaling we and those spending, spend uniquely remains digital are out taking set Transformation source across growing footprint ever. in of in outlined the advantage our key people at and accelerating With investing competitive services, our be rebound both range IT out markets, of start our post believe the global actively business. simplifying our we year, those through and business, well customers culture, to

were a advance highly a to business our ESG. our market culture also our attuned matters continue remains While foundational agenda than dimensions responsibilities be to Supporting in a as people vision and we're and delighted leader bold all ever, And to it our across where our continue strategy. strengthening with more our results, of sustainability to clear. time

I'm where our and every day workforce second to to represent our Equinix an I And where the hosted a world place and understanding to operate. listen, we learn we to I engaged build better around mutual which a all in In communities For foster say of reflect April, the safe. employees promote and early we XXXXs annual belong can be and employee for at workshops every confidently as understanding matter. our days and culture of workforce. inclusion continue of diverse attended levels

comes by world the enabling innovations purpose, the enrich be planet. inspired work, our and show platform people every that Our to day together, life our the up where

system other pact, our action. climate data and pursue for published data Europe transparency an we centers sustainability leading component footprint role environmental XXXX and committed to an coverage formation greening committed our we climate important As in ensuring data deeply corporate we than January, XXXX. XX% in the center center change European renewable digital energy and for rating I providers carbon again the a our highlights this received more Equinix also In proud neutral of are on our infrastructure. as that achieved am are by related announced Climate purpose, global A once focused Neutral to minus CDP survey, score We recently alongside

significant ESG quarters additional the out in social in ambitions invest our our initiatives. will We global roll leadership, over coming and resources continue and to environmental both

all as are on rates Now ahead were turning and year-over-year, $X.X a AFFO year-over-year, to and was slide EBITDA normalized on currency adjusted up of our QX These up was X, for results, billion, revenues constant expectations. X% depicted XX% our meaningfully growth basis.

growing interconnections year-over-year by In with colocation, by than continued well outpacing QX, and continues we now interconnections of by rates the Equinix outs peak driven strong the destinations. the organic Our activity. continued driving enabling more on metal next Equinix commitment have we More interconnections continue an to XX% hyperscaler value our slight set and our deliver Fabric, saw a Fabric XXX,XXX increase seeing interconnection up competitors consumption of across also now driven of customer leading saw interest XX expanded availability and offset metros. XX combined. inter remain strength this over our network quarter-over-quarter We're offering a customers to network to and of added Equinix the cloud this strong our build Internet year-over-year, we in proposition franchise feature across revenues added X,XXX substantially focused product service seasonal exchange X% and of by metro strong X,XXX year-over-year, and grooming by traffic fueled n demand, Fabric as platform. diversification enterprise expand in are incremental and segments. use offering offering our on also growth driven for XX% perform higher and attach than Global

our demand cloud growth our drives our our ambitious global interconnection as vibrant to we're time existing of on meaningful for xScale side and in network with to a for xScale rapid accelerating connectivity. increased to continue Equinix. the plans facilities With companies XXXX and progress offering add pace their digital faster On business, the make direct and onramp can footprint Enabling strategic footprints and market to customers hyperscale large core their partners. ecosystem at deployments economy,

the over will finance develop Our with support of XXX our megawatts works. JV program more than already partners the first in JVs two more with $X across our billion several

are broadening with XXX% We a first the reach JV five building hyper to scalar. major is and already campus of our our Dublin which ready, pre-leased

we asset. deals These London XX nearly of of XX Additionally, entire delivery. after advance pre-leased two fully alone capacity quarter our represent committed in megawatts end,

we highlights reflect to to Now, Please the well our of industry use let as segments scale financial classifications cover enterprise our that the me our services segmentation true updated and opportunity. verticals. and approach as reflect from momentum better cases customer enterprise and combined note

key we'll report Going four under forward, these verticals.

and social bookings and media, to growing strong our Americas mentioned like platforms. efforts node the of network well Equinix Expansions indication big is this a of cable the to global Oman as channel activity transformation. gaming SUB.CO, industrial an the Content enterprise expanding cable partners vertical deploying by provide to the with in of XG connecting include providers Expansions base work a Mexican streaming momentum included route service marquee cloud requirements, deploying quarter to we and their first customers. rapidly expand media video bookings edge first the led of the expanding as and across user system data subsea Roblox deliver development the for applications. Elextra, indoor digital Equinix business drive support previously our firms content. network to a Telecom, meaningful as one begins as leading and support multi-cloud and to achieve firm build platform leading for continues their and digital a entertainment vertical leveraging network to And offering digital to strength support more establish telecommunications solid resale, momentum provider wins A capacity for Australia. and accelerating Our cloud in multi a Fabric global solutions capabilities network British between capacity complete nodes part demand product and for saw as enterprise and cloud optimizing to provider,

the are growth, to new strong performance. quarter four bookings over additions, roughly XX% prior not cumulative Our continuing an include launched representing to on ramp XX the by which hyperscalers, bookings global quarter, equivalent volume that additive a previously also cloud ramp and worth wins this share cloud and of in vertical terms and ramps their IT on xScale strong our in on metros. exceptional was referenced the wins, our quarters in results of retail led with these QX do noting delivered is

access support by and Equinix world's and As initiatives IT Australian provider software GDP. deploying Expansion specific multiple across meet a XX services and latency the compliance provider specializing to and data the country to user in to in fortune can a metros Everest this infrastructure of experience. healthcare, eight XX customers metros cloud improve transformation including expanding enjoy quarter requirements XX clouds low digital top globe, result, now included

for over a our our wide Fabric. response. strength program derivatives on by service channel booking driven and IBM to a great of footprint leading a major services and range network manufacturer preferred XX% WAN of exceptional Expansions help interconnected global critical enterprises Partner of work broader across in well home their focus alliance Dell Germany and Our global with a global and and enterprise engines logos. working segment to Cisco's COVID-XX strategy to than resulting win architecture segments US, segments, bookings financial growing And vertical provider our the and a platform Canadian to mission launch, and as transformation cloud Equinix on Canada included from initiatives Group, and accounting healthcare our AT&T, a Verizon, expanding more partners US financial solution continued cloud industry million sub growing optimization efforts a leveraging such support included including continues tap as overall access, new pandemic transformation. resellers top shift members utilizing We their retail well SD-WAN from modernize XX% partners connect airline to collaboration and cloud to XX in their digital a to wins center, contributor and as as new had transportation as of digital utilizing performance, wins as into be ecosystem. focused to a to for our from exchange, across contributing supporting contact the demand deliver a new large results, matching with deploying re-architecting their CME and network as

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

Keith Taylor

Thanks, Charles. And afternoon good everyone. to

we heels On record to our gross bookings. end the a great strong XXXX delivered of QX with

quarter our solid ever QX bookings our performance metrics. across of ever and with virtually In fact, best second net our key all best

reflecting inter strong interconnection per substantially further capabilities, us service a AFFO with revenues, in revenues our we're continued a With and and increased start product inter represent Our and high AFFO activity our guidance of currency year, platform EBITDA, with our visibility great now XX% expanded continues our peers. rest a constant shine region the basis. on the and our revenues to XXXX interest recurring to Interconnection from of across share raising momentum. adjusted over separating

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

up billion, performance quarter XXrd over last Americas. slide depicted were revenues top X% business line QX growth our As to the on strong revenue led by X, year, due $X.XXX the global the same quarter of

our X% meaningful $X revenue same QX revenue performance revenues, work EBITDA headwind of guidance was quarter-over-quarter of highlighting XX% nonrecurring to our a to net million year, But costs. up to of hedges as markets earnings decreased noted expected, FX XX% last last quarter QX rebound this included prior custom of up rates. adjusted a strong outperforming we installation expectations As our Global of compared when in number due source. of to utility a revenues. forecasted anticipate lumpiness revenues the the QX $XXX across call, million, significantly on inherent operating due and net our MRR

churn million compared $X of to of $XXX strong and X%, million expectations right continued more footprint. FX the and across costs. right EBITDA recurring performance three prior seasonal performance expenditures. a QX net meaningfully lower a strategy regions. Global operating was platform with headwind rates, of of meaningful AFFO all due above the application the disciplined to down reflection capital right selling adjusted QX our integration guidance million customer global hedges included is MRR was a our and Our into with our when the improved $X step to QX churn our short FX This

MRR continue we per to churn expect average and XXXX, between X% quarter. For to X.X%

X%, Denver momentum with on adjusted whose and slides EMEA followed X. at Turning cabinets York growing region smaller in net bookings many covered by in momentum pricing, across basis through to spans X%. the New The through our X record and price a region a full and City. saw Dallas, the XX% good the at markets year-over-year and are highlights respectively, Americas fastest of regional MRR region step Mexico the particular with Americas We're large gross continued up metros normalized and seeing results billing. regions were and APAC in on

strong price near of for a remainder the revenue quarterly as first up partially XXXX this booked step and impact extreme be or X% situation in spikes Also, We strategy rate in continue business normalized during the utility and weather the our more through in large Americas have but better. Based to the growth the Texas QX. in hedging with minimizes momentum, to or in the expect of on year a we prior our follow backlog at expect billing from cabinet February. to experienced un-built half QX

our Our There revenue management well. and power during Oklahoma quarter. settlements Texas Definitely unexpected class hedging wind program these situation. customers our along as this with a due world this from spikes operational no incremental ensured trended we farm positively is to also protected weather price

including saw quarter, region region EMEA in record Our healthy exports the activity. strong and intra bookings

to Madrid, edge Muscat open Revenue be growth as engine, strong, remain markets customer previous core the in we're remained soon momentum Although and region's our strong increased from moderated also facility. our booking market levels Dublin, in flat interest our to seeing expected. of new although and and with metros our Stockholm Bordeaux

past with good businesses. Interconnection finally, rates pricing net Singapore and of in but this capacity to quarter led cloud key lap enterprise for Asia recurring repricing revenue bookings successful and through growth over by now with up and of we billion basis to additional open weighted our XX approximately and raised inaugural remain momentum. the of with refer revenues, structure, EUR X.X connect refinancing, showing constraints. points. quarter X. strong XX% continue region markets initiative. inventory Pacific average As quarter, bond slide capacity add and ended stepped Japan will denominated high, rate our our Utilization And prior the the XXXX solid to has continued cross a largely ease We increase an $X.X please interest potential at capital looking euro billion, which to And to due cash green

maturity longest of Equinix the debt result, a weighted company. As traded cost weighted center average average and has the capital debt now of any data publicly lowest

to US cost driving expect remaining debt. average the over our of or down yield refinance also near term. high our We Further bond

to peers X.Xx QX low remain Our relative our at net EBITDA. at annualized adjusted debt levels

pleased and to We continue BBB times. to very One, alongside delighted get today, S&P increased agencies are to rating that announced widened five this flexibility. financial support flat and to Equinix S&P our we our of appreciative leverage from we're credit earlier the work tolerance upgraded and we're importantly, continued with

growth shareholders. value forward long-term stated take for funding opportunities to to while our as approach balanced Looking previously, our we'll creating continue a

Turning the recurring a to in million. X,XXX Milan. for eight including adding quarter new opened $XX expenditures new $XXX million X projects CapEx quarter, cabinets were retail We capital slide this of IBX approximately including

On the has Paris new the megawatts facilities adding been Tokyo of we hyperscale opened sold. pre capacity this in three capacity of our in XX business, All and initial side JVs. xScale London, an

and We Revenues XX% of revenues represent Montreal also City. in for purchased development assets buildings our land now. and Mexico total from owned

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

Our Also X% now categorization stabilize during of we a IBX refresh prior consistent increase constant on annual year-over-year QX currency basis. revenues with exercise. the XXX by recurring assets years our completed

asset gross seven on assets generate cash return count by X:XX:XX.Xinvested. IBXs. utilized net and increased collectively These XX% stabilized Our stabilize XX% the PPE on cash are

to to in refer is does and the expected activities. XX update bridges. our summary capital - any XXXX slide to pending future APAC and Do note any or not XX acquisition, guidance XXXX financial Now, please guidance include QX, close and through results for which related market

previous of $XX and to EBITDA primarily guidance our costs. strong the X% our utility currency and momentum a XXXX, we're constant on normalized to AFFO This implies approximately guidance CapEx year-over-year, to and is performance $XXX now We're per we're range on and year. XXXX XXXX year also to approximately million, and EBITDA expected by AFFO basis. constant between operating normalized rate between raising And including million guidance operating a XXXX share raising million X% revenues. XX% about to XX% billion $X.XXX and to million also the the a billion, full underlying our net now our constant and that incremental grow investments between million to the range of $X.XXX current spend, sheet includes business, basis, compared these future balance CapEx xScale funds currency by jayvees. XX% project, and contributing favorable of represents This X% raising we due given expect by to adjusted after and of For $XX of recurrent X% grow revenues margin $XXX an growth XX%. $XX recover, our an which normalizing adjusted of into guidance currency

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

Charles Meyers

we In year. start had closing, the a Keith. Thanks, to terrific

by evidenced key remains backdrop As of continued pleased for and the strong. very our areas I'm against results, progress QX transformation demand the our And our focus. execution digital with

to As our And the build our the scaled of and size company, their we digital distributed we're together, world's digital our cloud plus than place before. connected to the accelerate trust in right digital and the supporting partners family world, the out the On for advantage. all thank digital businesses the as platform want providers you shape that of access edge, I leveraging XX,XXX cultivate dedicated enterprise ecosystems, seek are power right is more global, enabling behalf XX,XXX infrastructure Equinix their more customers service infrastructure infrastructure every to the they more all of transform ever places, possibilities, all say of and customers Equinix. to to the right members around of they the and their to

the our sustained, our investments opportunity our and forward in outlined we'll the for the long-term June, we we taking Analysts we are to our model, enormous actions where of highly making and and drive Finally, creation business investors Day customers. differentiated continue value look are the ahead discuss discussion to to

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

Operator

today Instructions] from And with Markets. Ari Capital BMO [Operator comes our first Klein question

AriKlein

whether the term, coming see. not see Thank specifically range lower that from driving you. quarter? to maybe longer to or a X% maybe down path Can XX% you What you about that talk the you typically a bit is in and that little churn

CharlesMeyers

on one in number had of great a probably a of you Ari. that forward. really sweet about be the best the and managing pull we quarter the believe best, as to that. we've disciplined some we there. of a business seeing that's had well the lot mid-size, And, cases. would targeting script, of I a Yes, think continues And business of - obviously our say were best times said right we're really, out, churn, bit want, spot We think for churn way into many that years. this of Sure, is I The little we in I to think pushed continue of our and probably to sort of I be over small kind to but and And I we market the the are, that of talked continue mix to of that for what bit as our we think little heavy we've execution selling use going we're go-to- that applications money us time. to And engine. a on in interconnection again, bode timing

And this really mentioned at over seeing range, down last towards have the we I other churn. in the end forums, in positive the high trending I which bottom slightly quarters is range. the of two now think So qX. been of the right the we're But even on run and up several

of of we the project it. have ahead that. identify identify And risk seeing underway and and out sophisticated think churn, from real the a all in dividends and in really way, business efforts really look at get churn we're I So to very

AriKlein

the is And thanks. see bit the to we go-to-market, expect should on few an additions, uptick an the a the customer area off investing obviously pace, activity it that quarters? and over is of there like recent you're a it, Got you're quickly lot seems maybe little in then next new just

CharlesMeyers

including enterprise XXXX. logo seasonally QX we're in I mean, of a we be but had momentum saw good as to our good a continues not bit fact in customers are count due that course either consolidation of terms people other we at going customer the see of that our smaller, think level, variety account to might the some leaving of strong, to smaller that to continue be additions, be activity we system some factors, we little - Yes, parent some movement seeing up fast soft typically, the leaving is strong, the we expect other financial results, constraints say additions we system And a aggregate logo think see new very we're the our new continuing logos overall logo due count logos, is new new seeing I new to But things. or I to new as demand due good, customer healthy quarter were I would think - I ads. the through for grow.

Operator

comes question RBC. next Jon with from The Atkin

JonathanAtkin

slide Question slide then on lease the renewal. XX kind and Thanks. XX of on about xScale,

front I'm would before on before is what the moves a own on it So, or think forward? in it's revenues you slide so that you outlines going properties about the that pipeline these xScale, a going of right just it's but Or would to of forward? kind about renewals customer managing different fee realistic remaining recognize to kind before, potentially your of like others revenue up, properties? get than Is that cadence of to there's us wondering, four mainly wondering, stuff accelerate. I'm ways lease could Thanks. be could matter to into paid, be And opened think more that in. pipeline? And XX, the how the you that if just where actually if would translates remind then income, get the renewals, some convert loaded may Or enable you

CharlesMeyers

opportunity on color the great and their through Krupal, as And terms xScale a Keith, is streams from the we great. the look, really don't want supporting facilities going people the core would there why at them into the to an be I of for we'll with I and with team us on there, we've then Equinix, and the delighted that'd back in impact kind Jonathan, the macro think Obviously, a to activity second and xScale our in of and see the increase forward. little the to talked more partner group of and question. well within efforts to as bit the and we Analyst at talk business, support for had the getting if on little we're you jump the about as xScale we're pick xScale Sure. And things that we're going in a of fee then share really start in come bit the flow level? from But the GIC, pace, that we about humming is of are opportunity of fact business. put Day, what out pre-leasing scope up

seeing give a possible, As And more in I of recall, that I you'll And of in I've platform what's think there's we at an I of clarity we're us high certainly, Day. are continue number more think really the And pie that. pieces but in the for the the to the think important out were pick business, xScale, to that we the right think we'll on Analyst really there value. the do other strategically targeting that overall end and talked business up we're said we now. XXXX, in momentum we we about that to trending - think forums, good opportunity add the we're pace. again, towards

the the don't So why fall you fee through. in Keith streams and impact comment on

KeithTaylor

Sure.

that the affiliated fees, income, global value in streams, equity you four always, two nature to will, are two fifth, through comes stream line as and recurring of is Jon, there's in fee then nonrecurring. entities. if And the So are

our So equity business. ownership basically, the that's in

quarter, in as prepared them momentum said are having three all this we to announced Now, the new assets of in our picked remarks, that, you are we up, all starting sold. of see introduced pre and

us. gives sense opportunity picking, a a fairly you is momentum substantially in with it front quite so picking of the up that is And robust

to going some but the well. going to see it aspects just it nonrecurring is so recurring June as say stream a the the the you're on from talk we'll you're And, the fee of coming let is to see to Yes, up quarters team. in more fee income, again, me start of it to coming it that there. exciting Analyst suffice leave what So ramp in but really momentum to see about Day, start

answered we think your I question.

CharlesMeyers

you to Keith, well, us the don't might pick opportunity what why up to be increase renewals the lease and as continue for ownership. just

KeithTaylor

surprise are the talking Sure. - negotiated about into lease but there's to of, inside they purchase consumption as built Jon purchase the are price, of properties, we the our one, about the anticipated of number also acquisitions a in of transactions And forward no to second the guide, middle cash, the you're arrangements both then we relates our lease is that financials. those you as have currently those

we So are can, there to that some than others. acquire, are where more continuing are are clearly important we that

can, our where focus same at so we And those on will important. most Yet as are the think the future about we time, that we growth.

world XX is I we all of XX%, still metros, or lease, roughly the long-term and many future right many over many, have that metros going many, XX we now projects it's is owned underway growth grand think fact is of on in plus the major with if countries. into my our memory XX% our notwithstanding across in a that property serves have arrangement

should future. over continue is to that to say, said that it closer, we to see we're are answer not-too-distant will it are there announce that but the all up, you'll say time. So I anticipating we'll, takes And transactions to then go some suffice we start when

JonathanAtkin

came of just at the were a higher, this could expecting then color we can than if in, least you I in drivers lot lastly, And kind margins Americas Understood. or provide. of that any squeeze

KeithTaylor

foremost, had, exceedingly the business. I business think Americas and performing I that and prepared first is remarks the well, like,

there's two aspects fundamental apple-to-apple when we that you there's to will region, compare there's versus the the region, the it the, EMEA if One things report will, business and the and of corporate APAC then overlay. the

grow more where So activity, are you of more our largely into because if we driving corporate I the customer the and without and continue base interconnection Americas business. overlay, scale, the and itself, tell strong we're we continuing very profitability region improve have to specifically our to in margins

response. So if that's you easy will, the, the

as and know, started around of you of some as of as timing that movement different part between a see this costs in expenses, movement just and QX, result second that And Q benefit QX quarters. then quarter, The QX. is the to there's those of we been

Specifically, strong that have power our the and relates was very as costs comments Americas, program, a in team this operational to in operate utility QX we made one very very, for case, a Texas. assets, the particularly again particular the hedging we effectively businesses of though, our

and spikes Oklahoma, a have we we we wind that price. have strong so in where us Texas, a both have also farms. against protected wind program arrangement, And farm in in those But hedging

margin Americas And is there's drive to had our making. around to exceedingly that you're then the continue business, and benefits it maintenance investments seasonality a fundamentally But seeing and some attached some that. business overall, so offset corporate financials repairs into US we its we've well And a expense. performing been by

CharlesMeyers

margin. business good two was the of in helps in And which mix MRR quarter performance, a the really always terms strong

to invest. an the margin as have of on continuing time. really performance, eye do expansion good a priority that. over were we we quarter, and the with pace we are and We're disciplined So, being pleased for yes, margin But us obviously about

Operator

is question from with next Credit Suisse. The Sami Badri

SamiBadri

thank the did for I about one and same very generating business. targeting would also originally is thinking that that believe include is that xScale. to My the helpful I that back thing Day, between question on xScale all do we bit laid think should guys yield range various in were we But Hi, Analyst returns forms that when to quite be visit is have you're that first out guys XX% at of published you a information income I the to recently. look going from you know the xScale you. on And the be XX%. be venture. XXXX the of the

CharlesMeyers

Keith, do to you take want that?

KeithTaylor

since Charles different traffic We're direct in Sure. places. driving two we're

So the pause. pardon

is relates So dependent, as to very be going number xScale, look, market it right. one

of XX% X% course, competitive - that. markets p then of some anywhere level, top project to at we from the Some markets of a And on are debt more at stream business. sort other the get unlevered we than put returns unlevered you're on we and of looking

Equinix what we've good better So profile look as hopefully not our shared. as if you when at than is result, return position a

really some sure returns But of good construction with contract. get long-term you Now, to if variation. under get Not that, make right project, appropriate with to be team, we having said really, only our but Krupal's the ask our me there'll specific well. on all JV a the working is with negotiating team partners, we're leadership various that and hyperscalers a the

is variance no quarters So the maybe though, over And prior do a in or momentum fact, we're years, broader see Day. comments, we made bit from than again, you'd said there's the bigger coming better. Analyst in little XXXX the there's June as his that that bending material and overall, a what the seeing from just given probably anticipated, more say originally Charles appetite us we I'll that

SamiBadri

the any to one markets you're Got you guide that I follow retire it. not Thank is quick And as mention Keith, or further then debt you. that high for Are region? and you just reissue you, in does in that? revisit capital when something activity, going up do you for have include looking yield know debt targeting, did that you have, another that to mind you do are green you

KeithTaylor

sort the a been what more again, Melanie's get long-term you that calls, are to asked with we've continue is some focus using can, was last is cheapest of you we the to retire the we portfolio where no I rate just XX-year then debt we're over, any equity, financial appropriate, have strong green, some of also to of be be blend curve. of we leadership, surprise to capital. newer we situations transaction what And said, again, And element team to associated maybe delighted do, say an create Sami, there that is wanted be will only but that announced, capital. thing that will them extent best really to flexibility the it our and as shorter everybody both have then XX important as a we there's no is in be from of tend refinancing the of out terms doing with under surprise would to here to source to result, relatively do take S&P some make that to other Treasury And term, I to with to only favorable on that it of end flexibility. getting that sense that our always many negotiate of debt. would the that. everybody also advantage that be But a will want go cost the but I'll attached over the thing has can our us over work this having that And make some make drive far, sure think where we've to the with our the green to upgrade. that financial we but perhaps And, that and And And I debts foreign upgrade, investment Yes, as even say let those more private X, our relates X, environment. will the of as possible just and of sessions, we was interest on the that anticipate math. a there'll debt, of will a I opportunity - that perspective, also that favorable flexibility on see debt do all not impact arbitrage balance of retard positive today you, sure down we

Operator

next comes And Michael the Citi. with from Rollins question

MichaelRollins

and good afternoon. Thanks

if just little organic in can First, the bit unpack more of I curious just increase a annual the revenue was you guidance.

And of constant for then just was from on X% in organic, unchanged that you billion that a revenue of think growth just last the when was up into currency guidance the how the $X up size $XX provided revenue range quarter. year, change And on million. you when that xScale. secondly, that does fit I of X% fourth follow XXXX that to consider

balance of happening running sheet So to joint some If you from help strategy. for some the frame that's some think it the the high-level projects, what's how before a we relative perspective. Can the seems this they taking should venture, on operating just business that core this impacts? just you're on enter you're financial of Thanks. balance about of into sheet, and

CharlesMeyers

why ahead the Keith, you follow grab guide, up? on XScale a don't revenue pair Well, go Sure. the up we and can and

KeithTaylor

are million charts, deck - there do Yes, One, the uplift. how Michael, that are is So think the is everybody, we try simplify a the when to are underlying we've really charts $XX aspects with we to two performance the it. There earnings in what things. couple its and business it. and I One shared

would a the to step cut what billion we by spot I look us all about But if the is starting we've up, range. do forecast the range rounding move that And is the X% see half, done based on part forecast fundamental we taken business, not rates we've business. up perspective. second when underlying what $X X% down a revenue the into the to took XX today, now using graph. we're that, it's added it's The said that give and which at on million rates, frankly, you're you in again, $XX the all you from of be currency in don't Having $XX rates to day also have just we million more, would more million off, if

X%. So before end bottom was the range, the of it below slightly

- you're you're the is ability $XX business. able there's raise million step call, just we've you're momentum X% Now, on on to the earnings made the the basically well first into this business, X%. QX in the underlying since the delighted in the be by Again, and that range to to we're again,

MichaelRollins

supplies? Regionally And where's $XX that coming million activity from? or

KeithTaylor

churn and better, record, a you gives certainly net record it moderate. on business business, Americas the bookings you're a getting continuing business. our to was the And next at lost our and Americas to three as quarters, a comments as so not look business our if of I'm result, Americas the our be had that wasn't it mean, Americas basis, relates X%, I it to in perform. to sure it is around for sort not of only you at going Yes, right the comment it's a the quarter, the sense

Europe the it. of will, overall; is you then reality there of of price we what And our sort adjustments pricing uplift the sort the aspect the that and down made But due some prior the two And year. lappy of across middle is platform. one aspect that's that's those so increases, regions business last if accounting the well through, other having And in some performing our to by by operating our excites there X,XXX remarks, us in momentum And the say most, the the transactions are seeing. customers pipeline thing just exceedingly to that in it we're scale is Charles we're a over and prepared that I is with was at one are his strong. Americas the comment way, substantial. delighted we specific made over just the if that business, X,XXX so quarter,

combination the as - Day. you this to have so a the and Analyst to go. still juncture. given guidance we And confidence And And visibility quarters three by all that, of that raise at our the an us way has

CharlesMeyers

move forward, that dollars into script are those of then expect of facilities structure, million kind out of leaning he and grab. we XScale there the macro as couple sort of gave would we guide reimbursement in market his Mike, overall, to And, even opportunity Keith there, into there's come being would moving the the those projects that which come of of to piece, a XXX the once we and JV. Yes, said JV form in, yes, in is on kind advance think and the because

obviously, to something due say are a balance on one into in circumstances, to we leaning and beginning. our to to obviously, projects the expect we sheet XX% get that's new again, we with, sort point either looking owners, those where and JVs I come now other reimbursed we're, able the JV we would be be at things that and those looking our since that are advantage so the a projects those especially that is think in back projects. will forward. But markets form where that of is things many us, or basically, X of to do but commitment to we're that to I capital projects leverage strength And we're those XX of to into year ratio, of preference taking move but the we our get, from given then And for

KeithTaylor

we an when our can joint reimbursement financials, think our at do if there, elevated, most particular recognize said like from like to the line. our but when different that unfortunately, add look CapEx said a in I this Charles the when ultimately, important we so part And uplift, spend, we to what case I just CapEx of get it on it you been to looks has venture, comes is

into that And it the disposition sale or progress and the of so JV. construction will be

And so a basically, it's up, gross if you will.

a I about Charles I spend there's it think that's Analyst the talking of because probably represented, at said, particular some we'll going topic. objective story most how JV energy work as really forward so more to much inside working around but good spend And gets And we'll we're our the Day, sheet. more. and of that do hard is our this instead on really this balance anticipate

Operator

next The Okusanya from comes Omotayo Mizuho. from question

OmotayoOkusanya

dollar really the are those at evening. seeing new But do Congrats around Euro seems Singapore impact. around Good or is the assumption, look currencies. here to we're on the of or some getting the the those more the the pound, dollar it get, dollar FX against When question solid a I take weaker. like or just an My that going Yes. currencies assumption guidance effects, to the going quarter. has there's to that all, get stronger the

So to the kind in stellar bit of which the of dollar, is I'm drag a with assuming assumptions causing FX struggling strength are kind otherwise, of on new kind I quarter this FX why guess little and outlook. the

KeithTaylor

you take that, Charles me to Sure. Do or - want

CharlesMeyers

yours. yes, bet, You all

KeithTaylor

Okay, thank you for the question.

of thanks raising sort And for it.

at the is US that if I back future. quarter, we to prevailing and dollar our were like in might and irrespective for the we the you dollar, of bias the overall that go every what US the what anticipate. to think is look weaker. say step that, something through rates, Having get all they when be exercises said of have to we forecast reforecast to And to it's

the QX from operate there's And will, on we of recall, the of when company, a the you if XXX. that on in. as are US million, if the call, that we weakening basket back $XXX took currencies you we so versus when And for dollar

we would guidance, there the you the basically analyze headwind. that million I impact spot the quarter year, and in avails as reverse how drop, reforecast when This so that that's of is based one actually use responses, we was given you we $XX it rates of But actually use $XX million by today, read of it forecast $XX on million. rate, the we've said when our other my

US it you the weakened tells that So Dollar again.

we lot what at we point how message. projecting try forward you are discipline the in It's might So then again, happen. see a bring you'll benefit we on to time, happen, forecast; other not if a do If and the primarily in benefit. dollar. see because of earned that XX% roughly it And are of does revenues than you'll our currencies the US

when hedges, some dollar revenue they off, so again, time burn we have and the in take to see then will recognize US And weakens, uplift do accordingly. you

and if So And hopefully just your that your there I answer question. me let stop did see question. answers

OmotayoOkusanya

very Yes, actually that's helpful.

little Could sales the it concern, or if some were Is your about bit in beginning year, of around that it that of concern whether verticals can stellar the anymore. Now, one the it a enterprise the was a was quarter a of you just and side, me about But the just statement? again, comments lot with indulge around seems some of kind whether you made expansion hyperscale was mean, nuances understand isn't I I at you've cycles that. talk on you given your it side. more. like fair a of the really just of when

CharlesMeyers

think what from think experienced of of we're make I hadn't to the digital I say and we bringing were selling of to I of is momentum the improving the any mean, the how delivering in to of work honestly, we in extension capability significant that we're really COVID, of figure our terms that would I sort set those our did transformation-oriented home acute trying matters cycle out in other survival. sales the with fact, sort skill periods of prospects see very messaging just not to enterprise We finding of sort really seeing people down. that, and dealing Yes, extension and than cycle, good where transition

And timeframe the which important that's with so, our really for really into are think cycles yes, and energy we we haven't good have longer, say but in they hyperscale us customers, in that key can of put and business late sales protracted, priority have fact, been wouldn't been a progress several I our seen I it's little it's repeatable to really made a important - deals which done. define that do terms under, one an And of we've we hyperscale that lot more partners to customers. we get compressing is can and trying

I would no, say good right feel I sales cycle So now. about

seeing a our at and are we funnel looking rates optimism conversion in our support about funnel, timing, of remainder the when deep think all year, the is reflected In we're we're fact, very like I and guidance. of which feeling conversion kind

Operator

Cowen. from The comes next Colby from question Synesael

ColbySynesael

Great, Few thank you. questions.

XQ - on So on QX the guidance. yes -

XXX clarification thinking a including going what I the forward? assumption sense a be give CapEx the portion. was better XXX guess guidance, is might point like $X.XXX up just your the step in $X.XXX at range maintain wondering and guidance on we to we of if using a given felt levels that You but saw press but then for back you could were the at least could the wider of included, mentioned you're just me what xScale, the it is saying just it you could volatility nonrecurring And your in some portion, for is fourth at like like that excluded. nonrecurring the to prepared looks you us to that least look the way MRR it's reads And release secondly, quarter? remarks I like within reads, you're some; to

as sure there. I of evening. Day, get this to to obviously, to is xScale then focus? you to It's are Like thinking a the be relates big be off What want on. the just are that focus. been clarification what maybe investors hitting big make terms you. Analyst big real questions you're a of little a focus you where want So companies to planning? I And quickly else going just their think Thank that mean, in do going is bit really home

CharlesMeyers

I'll Analyst you about xScale Day Keith last on revenue why the then talk piece up MRR range, don't the focus. pick the and And QX CapEx? that and

KeithTaylor

think Yes, as Sure. to you're see Colby, means that they nonrecurring I think starting 'XX, of - to what you're at about could step that you nonrecurring, up to that. relates revenue a QX it could is to percentage look you like the if something of get

the than install coming of a then that but saw QX. we're and close nonrecurring it in look, we the year, be some And more are remarks, quite back down QX this more moderate know the there in the result, a higher level will and well, looks QX, QX, as again, to a I reasonable place revenue more of taking see from reference that large said you it those back down reflective and that back, some moderate of that we the QX. what in like up, a for As of in a you'll couple installations percent - prepared quarters half because - made I of that again, were step And work first doing.

to So want - make hopefully, helpful? I is that sure

ColbySynesael

Yes, it's perfect. Thank you.

CharlesMeyers

then the on CapEx, xScale, And Keith.

KeithTaylor

as I'm number. Yes, sorry, relates xScale it is included me, that CapEx the pardon

ColbySynesael

talk about it's again, be driver there'll about a importance definitely on expanding transformation platform, the we how Day, be overall will fee relevance since the not through the opportunity very major to going on addressable momentum and in impacting there overall overall. our our increase flowing market, some than it xScale channel at the in going of streams, strategic talk roadmap eyes of business. what And don't speaking great the for world the is to Again, consuming positive metal, our customers of we're through least also engine to be terms our ahead. think I other in will additional are We'll focus start course, continues including customers, how to momentum, to horizon of our now be the consolidate great June. Analyst then we're, some the those we and we're services digital how revenue infrastructure to in the I on to in business. to and a color the and Equinix there those flow to we hear that to to views we'll coming relative about are our And number the yes; it's think going our thinking response we're we're and, continued how positively digital But talk on But things, what and to giving doing and things. digital really adapting of that responsive our see about side adding on things of their services, from how eager customers, for continuing we're and share our to edge to continue what digital capabilities and doing and evolve and scaling respond to maybe how that, like about go-to-market network have we're

Operator

next from David Green the comes And question Guarino with Street.

DavidGuarino

Hey, thanks. same yields timeframe to the quarter rates Last pricing Equinix xScale mean you better space. you might about initial ability hyperscale over cap JV development than done entered that ones initially GIC? the have for hyperscale happened what's guys what their to were and the since on talk that for that in maybe mentioned you achieve and declined Can just

CharlesMeyers

look said, and of continues going we the returns our that in kinds fees to overall profile we those Keith that as mention what very I think to post did return on Yes, I that be leverage we're say post attractive that of I mean, terms think projects. and would getting

quoted we're of with JVs market. have and Although, I the we GIC, as relationship with and of a very projects think JVs. he X of to competitive sort that in to think because of nature because overall is of that, world, that we've also to similar seen wide think ourselves are think there and attractive looked I where the very that of individual these the markets are on said, of pleased due But just we our I think in as be markets had, depending a I partner, and we're terms it terms, set find individual to range, engagement nature on and yields we continue ilk variety that circumstances, Keith at certainly is very that, the of do end at of XX are terms low that the looking can range under favorable of, there we've where sort extend market at based other we've the a around the circumstances, we

to to get expect, we're favorable And them able terms going and partnerships, for so be very a having those we win-win. very much be

I Keith, rates. you if add want relative to cap don't So, on to anything know that the last topic

KeithTaylor

No.

leverage in more Analyst the energy out give you pleased comments. And, Again, there's a a market, look color. we be we're level, on again, Equinix. able then at put and and talking overall, and stream and be spend when it will that the more break lot will June think in business. a for I about to project we then we specific business, Day, to reflected we're the with to little going was the the this bit that And p the the again,

the make that you overall with probably project, think Dave. satisfied will I more

DavidGuarino

Okay, maybe no, And more that's one question. helpful. then

share really for Equinix about haven't M&A We while. if and the be that? a potential your a public-to-public you center talked this topic But sector, player REIT thoughts data in in could on could

CharlesMeyers

locations And successful in Keith to our and aligned feel I regard believed would are a are terms in to key an were be We were we've we But in that value to if out for been think our thinking and there basis wide there's in markets, platform in towards believe around hasn't going more economics to M&A have continue the those deal our I'd the if around But and not say a filling eyes flow want always our but right strategic, markets as that scale things. to be there. now active and add, the with say there quite probably that the shareholders. them again, customers world. we're open you business in of open. little we're through of about changed; private probably adding going our highly in private some bias geographically, we've greater we we're terms expand markets. that That private of more opportunities in we're we're that clearly Sure, felt of be going been how they I'll opportunities out tool comment have using and to how opportunities free. we create and accretion and always for to transactions we like right our

Operator

the And Rasmussen from Stifel. comes last from question Erik

ErikRasmussen

of environment comment relates back Or Maybe really xScale, a you been the just broad you based? maybe more Is past few on leaders? concentrated as this on Can thanks. into Yes, more that the few have to quarters. leaning the it over the initiative is hyperscalars? just with

CharlesMeyers

and hyperscaler Yes, I that when pursue of players about degree we is would business with taking some the to of that think demand, the the be relationships I we talked the more of is they is formulated that providing overall overall that's end and the mean, today, just pursue demand. that of concentrated, that's nature there more a It we largest xScale of with. would approach, entity the range or community up

it's we or of beyond pop of head. three off but So the mind right four the sort have level, success that some top for people to concentrated had would their at significant

in XXXX, nodes, those long that opportunities. had I largest time, - continuing of for with characterize we've deployments relationships a many - infrastructure, our lot continue of for and at other I be on with about to sort evaluate that role play talked build core of really really we very our we're zones, that that them, Analyst so, of is the hyperscale on would relationship to and might and we customers, terms they are on really network because the strong when amongst going I xScale. community of of more availability the of the large I that say hyperscale But a of their Day as I their ramps, we're and their to a it And think full focus backs important elements outside our in

So that to doing we think for it's going as with priority really we we the people a as at hybrid cloud performance. adopt is economics of choice, in that be terms of them. They're have multifaceted that architecture very critical, Equinix relationship a and superior believe them multi drop both in

hyper with demand to xScale, from too a basis, concentrated important have to continuing are relationships degree and so the And strive scalars to very to us, with customers. that certainly portfolio we that their the extend but larger some we're

ErikRasmussen

there. year Great, robust change demand competitive be activity maybe pretty has then and my environment after to closed up just as especially it Europe, that in Interaction last, my and appears up that follow deal DLR seems in any a around still investment picked is also

CharlesMeyers

But say I Europe, there pan a European case. I mean, to am not going that about we And no, continue what to think in market Yes, to would critical, I much credible said I the about has is think as continues player great and I competitive success feel stronger think and been is, very always in global our story. and position had I've that the good we Interaction our a very continue really. we position have, we there. overall be build feel good on success to

Katrina Rymill

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

Operator

conclude participating. Thank thank does you. conference. today's That And you for

disconnect You at may this time.

Katrina Rymill	Vice President Investor Relations
Charles Meyers	President and Chief Executive Officer
Keith Taylor	Chief Financial Officer
Ari Klein	BMO Capital Markets
Jonathan Atkin	RBC Capital Markets
Sami Badri	Credit Suisse
Michael Rollins	Citigroup
Omotayo Okusanya	Mizuho
Colby Synesael	Cowen and Company
David Guarino	Green Street Advisors
Erik Rasmussen	Stifel Nicolaus

Equinix (EQIX) 29 Apr 212021 Q1 Earnings call transcript