EQIX - Earnings call transcript Q4 2021

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Operator

Good afternoon, and welcome to the Equinix Fourth Quarter Earnings Conference Call. All lines will be on listen-only until we open for questions. Also today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to Katrina Rymill, Senior Vice President of Corporate Finance and Sustainability.

You may begin.

Katrina Rymill

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

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

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

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

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

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

Charles Meyers

Good call. the with Katrina. exceptional digital fourth great our in in and continued more afternoon, low quarter earnings ever the Thanks, to Americas best our backdrop demand year driven continued with an welcome business our performance services portfolio. a our but had platform, to We across strength specifically churn booking everybody, momentum for and finish by our

never leader, stronger, we to implement ahead. advantage to a cloud and Increasingly, customer to more and a more opportunity choice. the distributed, sustainable of portfolio market demands, business the our before. continue capture secular have of as as point represents flexible, ever customers For architecture Nexus respond the And our fiscal multi global digital as of our continue the XX consecutive and billion the global years over top full-year, we demonstrate landscape, $X.X complex AFFO revenue, value growth foundational both of attractive bottom to our our relevance globally achieved proposition. the revenue transformation Amidst our continue results while as continuous and and a prioritize line. we increasing drivers powered, ecosystem leaders that been and platform of demand increases infrastructure for interconnected competitive than digital dynamic source critical share to marking driving to amazing more vision of more per a XX line Equinix more year is deliver innovate evolving and and against quarter and uniquely our expand differentiated enormous clear hybrid these Businesses

our of a resulting AFFO our And business range. trajectory the above with volatility to rising in underlying churn guidance still in at stable and exceptionally expectations. the year business gross underlying revenue with of that specific our dynamics pipeline, long-term the at pressure is long-term trend, high solid margin a in look and we be the price is an for Analyst towards per outlook of power despite the XXXX, or Absent within momentum As well high-end Day line a per associated strong, guidance demand will our our share share ahead performance end range, our producing price AFFO outlook these is growth guidance Singapore.

a Day business a program with for as our showing prices be performing [indiscernible] in the share or we exceeding continue very revenue the of objectives remain line and providing robust top meeting year. is well. over and current second volatility hedging utility AFFO Singapore And to believe line, half on see in have for track both the power and our we We in per will Equinix and to the we Analyst We global across temporary of value our smoothing growth moderate, have and from prior-year EBITDA we Bottom to in margins effective continued higher XX% and expect strong by years, investments, and gains confidence continue predictability moderating price XXXX. headwinds to highly ability to scale resolve customers. efficiency adjusted realize dislocation signs is markets the the transitory

more year-over-year ads XX% are all and reflecting normalized our cases counterparties. to a These and billion basis. X, year-over-year, strong momentum up depicted results grew as grew were for use expanding $X.X for solid Slide X% currency the with connections share more X% per drive Fabric to year-over-year. as current also the X% Turning was AFFO with year-over-year revenues on revenues full-year up growth EBITDA locations unit adjusted on quarter Equinix constant and Interconnection rates

ever. with continue business, of the multi-region long Our predicts global awaited XX%. entry largest be into us the reach impressive leading with of Africa manifestation and of infrastructure an economy. first to that one position X% mark we increasing Ghana at competitive will strategy center and the QX. in differentiation This XXXX, presence early providers close to Continent remains quarter-over-quarter December, generated announced acquisition Ivory as acquisition Africa's see the best edge. digital enterprise our with Equinix customers from In West drive This digital customers more to XX% in will continues our revenues and will our and data by Coast, long-term leading of in as important MainOne, a a edge, to the than IDC as in the data provider Equinix's become intended step connectivity to well solutions African Nigeria, set

will, first leadership, EllaLink, flows and our operation strategic newly Salalah you and also If subsea subsea and pops as traffic winning Paulo ever the IBX ongoing we're new cables which like internet Oman. IBX, in with completed such supporting into by announced targeting went entering Italy our recently X, X, Lisbon cable our our global interconnection Sao in and America, markets X Genoa and between by IBX recently Latin Madrid Europe

underway of us And we representing metros and XX,XXX remain business end, XX as of and excited the services, xScale XX we're Services. and and automating of results operating continue and and that appointment over Our Jon the efforts. for President and our market about leadership these on global our delivered interconnected scale data Center extraordinary We our And cabinets to digitizing strategy our implement capacity. a business Data countries, center major to platform services simplifying, Lin portfolio extend remains recent has of Americas our is To of of of expand across to seeing focused XX bedrock leverage. retail, XX EVP colocation. the position global Equinix. with in great we're already allowing our Manager the results on projects choice footprint Jon over the General enhance megawatts to

new recently launched times Secure and For capacity and for example, commonly Express product, dramatically we enable to quoting Cab our reduce pre-deployed most configurations. our leveraging online cycle ordering requested

driving coming new to service quarters, increased the customer to We in out roll simultaneously enhancing margins. customers expect responsiveness while this

drive have now service interconnection and saw IX our enhance of on franchise peak X% and our enterprises Internet industry delivery. added XXX,XXX global improve X,XXX Our providers per continues the APAC interconnections perform further year-over-year, ecosystem we XX% first organic platform. QX, exchange for over surpassing an traffic time Internet XX as density. In well increasingly peak to leading look traffic to and incremental we second, growth quarter-over-quarter to in terabits traffic with interconnections as

services, they infrastructure when performance want integrating it enabling Customers computing two. deploy workloads digital cloud want reshaped it, simplicity. to for they expectations between cloud the has infrastructure and to infrastructure private permanently want agility where speed Turning and and based customer seamlessly and

embracing And markets by XX our metal virtual to combining customers build of of services, and edge capability fabric, a end our a of plan presence. expansions are across broader this set As the will points network result, XXXX. enable fully

Equinix use broad cases saw a run For Fabric the revenue million with destinations. quarter, set our Fabric for of using customers excellent eclipsing a of in growth $XXX variety across third a of now rate

capacity. joint new great business And and Equinix network facilities under of across XX and strong customers, traction healthy and Our South capacity. and X of our with phase results representing of establish closed have bills use Frankfurt approximately than leased announced Shifting optimization to of January our installed. with the out XX plans agreement they and with than expected first currently Korea Total phases at growth saw when WAN continued is our edge Paulo during data we to development and and develop mix delivered Sao nine of more asset investment as an quarter, cloud-to-cloud xScale with expand first power implement second from be the backlog. service a to the logos joint to $XXX Metal xScale across a XX in GIC venture verticals $X the fully xScale, existing megawatts built hyperscale into new We to assets ventures million fully now in megawatts various wins more XXX centers to globally, we routing. two billion a with

over initial now XX% is our is megawatts leasing at xScale over So leased. EMEA XXX and JV

our of me let the some cover from verticals. highlights Now

Our as support led bookings the healthy edge. had data delivery capabilities to with and the by consumption Americas new and network expand logo of solid activity quarter companies at optimize digital the vertical

operator Southeast pairing XG the cable wins Inligo the telecom telco, to New deploying subsea a cloud Australian an support systems a Open Asia, company and and local improve to Networks, infrastructure to in Australia infrastructure expansions hub first and U.S. native performance. a XXX RAN-based U.S. Lisbon Fortune network deploying included digital across an new deploying cable network. and support African

from Our had scaling services in of for NASDAQ, including XXXX, ultra or platform as home Edge predicts a to security with based fueling infrastructure geographies. record our almost low strong communications and XXX Edge provider center company workstream Equinix enabled in cloud QX smart effort capabilities on and influenced an for IDC customers spanning Carteret. digital data demand modernization virtual and company, industrial the NYXX infrastructure its to ADT, will segments implementing embracing enterprise deliver sub compute be in FinTech, with an streamline Fortune center the private connectivity data another by expansions, latency wins on its cloud leading collaboration and Avaya, U.S. infrastructure. saw strategy bookings, quarter cloud multiple strength particular technology energy hybrid of global economy half

by support bookings for Our total service sustainable to cloud and and Zscaler, cloud partners. led infrastructure top to vertical global good services their growing Cloud at capacity with provider, IT EMEA Singaporean of on-ramps provider provider, deploying Wiz and deploying full-suite XXXX Stockholm, solid cloud and segments, on Oracle, this five services a included traffic And Singapore, APAC. business new and at more Global sub other Milan expansions bringing Equinix XX upgrading Technologies, a support network than the their of software software momentum available Metal to any transformation, regions the seamless The expansion. Equinix in IT leading offset enterprise Security in on-ramps a quarter Edge. and FastConnect Fabric upgrading number and quick

growth, Expansions media XX U.S. based three in its Cloudflare, Our to global segments digital and the security top content included compute wins Exchange, nodes has record credit regional company network by digital strong and deploying activity. support sub channel expanding and web global tech footprint traffic APAC their and demanded the in and cloud infrastructure media agency led hubs marketplace, ad over operations. global Index expanding publishing APAC in vertical upgrading in a markets.

and our bookings a range Wins verticals, and continued a from quarter logos. for of strength set program of with enhance across delivered wide year bookings Wipro including Dell, a reach. infrastructure, company significant channels our industry helping of AT&T, a sight like of XX% and nearly in coming to the for XX% scale Microsoft, Cisco, accounting grow partners channel and close the record cases utility we diverse strategic use to new the and partners Our of And our line leverage we XX% U.S. processes, systems with have of our years win and BT, to modernize IT its to as Google Europe were and

to quarter. let So now the over me call for Keith results the the cover to turn

Keith Taylor

XXXX. Thanks, Charles. than remarks performing business the while recording year. end by quarter both year my in extremely Frankly, the prepared great into revenue expectations a gross activity, our strong we're afternoon ever our and I'll start up saying had our to bringing for delivering and a Good momentum recurring quarter. better channel bookings step is our everyone. with well. net for We record very And highest

resulting rate churn. record effective leadership of pick without any stream from our and year to $XXX million. year up and reach approval XX,XXX acquisitions highly distributed IBX were Americas in last of assets prior highlighting engine. strong deals double is go-to-market the business, and portfolio major the the bookings revenues our from continues The benefiting over lower in the up over the year growing XX% scale [Indiscernible] interconnected XXXX, For philosophy over of region tremendous

settled company, an per the churn of per guidance X% of X.X% to end for For or at quarter the quarter, range our lower the of year. our average X.X%

Our are the lowest with infrastructure IBX. the right making extending reflective Quite we're leadership and which digital the customer the stressing highly level our put to right into position since as simply, of applications right the our XXXX, strategy decisions company. world's is

Now, continue number inflation. as that a to mind as macro-economic top we are of you, and costs, such supply interest factors perhaps for power manage, rates, previously chain, proactively discussed there of

and to the margin As temporarily the rates XXX it favorable Texas power approximately February. Singapore, from costs, last we're pressure, to of seeing in power due settlements points lapping basis in inflated relates vPPA your the

hedged demand unusually to for intends to additional and we is we're in our period. periods to XXXX, to continue navigate for meet volatile the future predominantly parties, meet For 'XX global but past layer as hedges exposure, the remaining

we spot given market higher to noted, other dislocation significantly rates expect current transitory, prices appear that than be to the in, largely the Charles remain down, Singapore any we operate in markets market although do they As the trending are be and volatile.

the reflected EBITDA expect over half second margin we deliver As expectations. our first guidance, against in path Day Analyst half improve our our adjusted on and and we to AFSL to margin remain

our interest environment, balance As the very to it rising is relates rate positioned. sheet well

increase of oil raise the historically whack. to returns And average with interest of rates, exposure near-term while fixed weighted minimal substantially period our a higher multiples nine to years. have despite levels, the debt than over enjoy the rates interest We our maturity across low recent XX% at of in of we cost cost and remains borrow

fueled continues Our sheet, generation financial to cash by strong capabilities strength flexibility. our feel great our And has significant. balance

say strategic Lastly, resulting with fourth organization. execute to expectations. our to and projects forward expectations. invested in development marketplace, continuing added is we in seven the program procurement in not heavily separate highlight and pipeline our XX there regards to pressures partners across in point, to placed sophisticated deliver we've supply suppliers the congestion across but and markets. and that a in quarter the chain feel inflationary sourcing us against well leaning while return delays new XX a our our platform, robust alone, we Allowing limited against IBX To the very projects and isn't to build we our six But supply chain. across with xScale completed markets, against This

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

strong stepped the to QX with over due billion led by down up business expectation, quarter Global to non-recurring year of integration QX and range. globally million guidance prior higher total customer the and above quarter the range QX Global last performance across were of due up $X at and end included was QX revenues X, when timing top diversified Slide targeted included strong installations. recurring Americas. top to $XXX million, in million quarter X% prior X% platform our global with XX% our MRR anticipated $X guidance our adjusted adjusted and X.XXX revenues when the X.X% our spend. guidance capex of to Consistent while hedges range. on guidance AFFO million of churn net compared expectations, the Interconnection end prior costs. three all our depicted of revenue revenues EBITDA, X% regions, of $XXX XX% our range and net our million of a in portfolio. QX our to our and of absorbing with performance above rates operating or As reflecting over year EBITDA similar growth XX% same revenues last hedges a global to due QX FX large our the revenues, the continued XX% were strong of tiny investments seasonally recurring same of was bottom revenues end FX was headwind headwind product compared $X the line benefit to the years. and of to

Turning Canada part our Angeles metros with Denver, were Mexico QX net X is action respectively. expected. regions XX% the Americas a bookings strong lower by Americas Americas increasing led perform deployments bookings XX% year-over-year cloud the at increasing than broad in expected, Canadian and and gross The churn. due in pricing out to better positive with City, assets by Bell markets. key The activity, market. channel in Toronto continue momentum year-over-year, XX/XX MRR the and robust had APAC outstanding region carrier a based were to stepped through Los Boston basis another and on growth regional back X% The to delivering covered quarter record to fastest up normalized Followed Slides X. EMEA on results highlights, as and region growing which year-over-year Former

Dutch And region customer with new planning. a quarter in given we're above recently a DPPA pricing with in businesses. including to in quarter megawatts efforts, local a bookings, developer the India GPX like had wind Finland had this the strong retail seeing of our activity. Interestingly, interest region and is EMEA cover strong farm German a sustainability U.K., solid well with our good XX experiencing Our performing signed over region finally, momentum capacity. solid with Asia-Pacific a We're growing

Although welcome center lift constrained, remains the government's the on decision capacity new recent Singapore data moratorium we to business.

well against construction Singapore's sustainability. deliver connectivity and positioned new to needs need international be to to forefront forward feel deliver for will also the of strategic at criteria. digital but extremely economy, value Going the government's We

funding at with At and the unrestricted Slide additional please up our approximately structure, operating step of approximately renegotiated ATM end of cash looking billion quarter revised X. covenant the cash our revenue last package. we refer also January, Now and to flow, investments liquidity, million in early us year from to line capital strong offset our our providing to payment. flexibility of $X.X a financial credit due while access dividend billion on by In $X increasing $XXX

forward, shareholders. on continue investment approach our take to Looking while with staying our to grade we'll balanced creating consistent growth value funding long-term rating, for a our focused

X a expenditures million. $XX capital to quarter, approximately capex recurring Slide million of for were $XXX the Turning including

as increase Perth new We asset our over seven opened call eight prior the expected. and meaningful Genoa, new Our and Munich quarter including major in a Osaka. last projects in xScale IX since

XX% our Revenues for recurring from and development revenues. We in purchased also Istanbul. land of assets own Dublin represent

Our returns deliver capital Slide as investments in shown XX. strong

Americas year-over-year stabilized the all growth our expect from not market capital our XXXX Starting constant invested. a acquisition XX% guidance and assets the as due the now for growth. any of results PPD with pending potential updated or the normalized a the include range cash-on-cash summary The generate on of is are Slides close. to and churn currency XX% of growth business. These rates by end we revenues, long-term XX recurring guidance through targeted are bridges. assets X.X% revenues continued in per please momentum XX% top basis. XX increased refer basis. a collectively knows and Who growth one to to X% within of the XXXX utilized And our gross return anticipated on X% currency range Our The MRR main does quarter. future And on X% constant reflecting of activities. end for above stabilized strong our XXX expected remain rate, to to expected top-line top

the adjusted integration the operating We margins muted EBITDA higher result the XXXX expenses. expect strong XX% leverage utility in costs. The across and of business excluding initiatives efficiency of temporarily by

AFFO integration billion, expect be these $X.X is various than for reimbursed XXXX to is balance per be spend. to which our over in $XXX assets to AFFO an spend our to expected to billion slightly including is capex to expected sheet xScale X% of approximately X%. X% on to expected basis. we XXXX year, compared increase million grow expect $X.X And the of approximately cash million of increase JV. costs And recurring acquisitions. into XX% the greater about XX% billion, as finally, $XX previous to We incur X% And we transfer XXXX $XXX growth $X.X to on share expect share XXXX prior million dividends capex increased per we year. or a

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

Charles Meyers

Thanks In immensely we're pleased about opportunity performance in are of of the the ever with business as as front our us. optimistic underlying Keith. closing, and

a ahead pricing our expectations. business Although trajectory us XXXX meaningfully the effects that indicate from our normalized results of of would elements power Analyst guidance, Day puts transitory impact our

impossible And nearly lower to plus year America's our of infrastructure cultivated and more to of continue place XX advance to the history, Campaign as I to recently XX expanding ecosystems period digital number to to Advantage the and in belong the JUST quality. of as XX companies. a ranked powerful LGBTQ are intend year XXXX say We the and Fortune and our car foundational the one now half Of every a Singapore world's a most rankings JUST leading to and deliver we in created set we real world's Capitals record addressing climate intend business, proud in market be impacts growth our scaling addressable note, Human estate Overall with culture were most have digital fostering And confidently end to we advantages XXXX. continue the customers, transforming A agenda, advantages to at rapidly strongly Rights platform, work feel a our strengthen comprehensive climate excellence mitigate will physical interconnection confident position compelling of for neutrality peace by be translate duplicate. I value and can a that deserve. that and advanced creation. company they to continues continue to center where to and the every of day while are and expanding thrilled from safe, on volatility. And track perfect urgency metros in reach, to we the a customers aligned to trends long-term world of gives of I'm best are parallel, market countries. strong the commitment infrastructure ESG workplace than to person a XX,XXX that by with business promise speed. service change mind matter. access over bold also software accelerating services data to work nearly digital hard most receive recognized further dynamic a the These market to XXX, in And score

enrich our the in together, to our As that to the be our planet. comes innovations the we purpose, our strive life enabling where fulfill work, platform world

to open other, to and communities, me And day there it let you, shareholders. up every show up and continue each remaining our service to stop our will customers, To stakeholders. for our to to questions. We in our

Operator

Jordan Sadler, Our KeyBanc first Capital question comes Markets. from

Your is line open.

Jordan Sadler

if related on costs that on identified you power you afternoon, the you to And your within of that Europe, example, prepared you. in be I seeing margin with but I might there customers then maybe for how able can And you're macro year-over-year, XX% first discuss any would had? impact Thank like XXX exposures just were Keith, basis the in impact might think impact and to push to remarks, you some related Singapore? to some have to that was first, just the through the good points offset the maybe it dealing you maybe Singapore, touch price you're was what specifically of seeing margin to in other factors said you separately, increases exposure the

Charles Meyers

Sure, Charles. Jordan it's hey

aspects power Let some inflationary that of tag on can power back give that are well. additional complex, on is of that aspects bolt-on the as step we the There's dynamics you of of the easy summarize. dynamics. net in the business pricing discussion then me pretty but it color all and keeping And quite sort broader to the

we as past, we've a which really in trends hedge Singapore also given strong been ability on fundamentals the were sort of Then targeted of price margin which and a there position. offset volatility. So the show, locked rates bridges get of the other two an impact to trying Fall, limited and very we're in through really clearly than business, the some which we, that really a going is Singapore, around that's to how to really the and in you'll by the materializing. given markets really about, we minute. But we operating world. wellheads talked to And one, than that market our a market we our defer in negotiation be And with rates time, were alongside talk in continue where here touch ongoing through combination driving multi-year level the higher the historical XXX pass about rates that just dislocated, increased an the of volatility, we power see to I'll as I'll which on about at or we're from locking seeing at we've outlier. Last power really of Singapore. increases, able other to part were offset contractual of impact the have unprecedented pressing Other Singapore factors, an in the advisors, pleased that that, decided looked leverage bps the

the And what sync so market. a experiencing us out to and lock, the leaves temporarily able in rates offer counterparties spot exposed with customers bit really to of weren't rate are

we're bps additional bps where that of course and the an impact bps, last that our factors on Texas at the year about VPPA dynamics so of XXX that's favorable what year-over-year of then for So an through there's XXX account margin. year, exposure on a XX is the from estimating basis those the about combination compare

that, about the change. absent And would health a think margin in again, a business. and context, you'd guide talking tremendous the of that reflect I be broader really So XX

are that's Europe, the So, volatility. of on And where Rest issue. margin there's the yes, we across

again some price phase of those increases, sort just we've from nice but factors operating can Keith, one that them we years, maybe like a managed pressure leverage through we through to roll in that said, we seeing couple by any plug, increases, business. I in comment of is big on that you over As pressure sort we're being inflationary in broader of elsewhere? cases, offset and -- the that feel they're the Europe targeted going increasing, are too price because and to

Keith Taylor

as it on when and procurement couple hosting, the over and we've just in issues. invested some getting then the and at In that over bought supplier we of strategic Jordan, Yes, said, heavily team last we've I years work inflation comes I really to said, of the of the down sourcing ahead that partners time. many of cases, draw substantial we're location, the inflationary aspect, inventory

again, are but around where, extended real where to over with all been it all when the supply sophistication not the good I'm aspect only human inflationary and little see the by another experiencing. over increased doing, to team that. And we area difficult we've though, greatest that in, sourcing be a is some do I that But where got the think doing available, of good capital job humans what period. will going So what need going risks of sourcing mention able the of construction, on an job in of bit we've we're say have many items that's that's supply material we've and the side. might we're look just what probably other larger locking that more one that years, be some risks buying so manufacturing. the mitigate just basis not that locking a available, the to you and And we across our the our is commitments for when cases, time world a forward and the to and the others working to that commitment, others got in to

price to repeat and price times into we're sort And you in say seen ahead of in we sets earlier can that of putting different so the have things comment circumstances the us think increases appropriate in Certainly maybe all so that through thus increases market cycles. prices heard appropriate one putting have you are that alluded the I limited All in would his you the before means on than solely have get prior delays that in the that marketplace, didn't, just getting on might gone it. market, say otherwise but to far. of accordingly. done we good we're of Charles appropriate queue and that to, just up you've really depend into it I And is to have the manufacturing commit spot, I yourself

increases, very positive served operating we our as in negative last talked us more plan. price This of action, net flat well had quarter we and meaningful decreases the an pricing our even so which organization than our increases pricing offsetting about I to think pricing price are again, can't time has

Jordan Sadler

Thank you.

Operator

Michael question Our next from Rollins. comes

Your line is open.

Charles Meyers

are Mike, there? you

Operator

We may have Michael. lost,

Charles Meyers

queue, go to next please. in us Let the person the

Operator

Thank you.

David Our of Bank comes America. question next from Barden,

Your line is open.

David Barden

two the I Appreciate taking much questions. Hey for guess if guys, could. thanks it. so I

the one across different or first seeing Charles, you vertical Keith, highlighted The that we're of markets. strengths some of maybe kind

one put elaborate thing, maybe bit economies demand up? come And and Could of evolve? on the is kind how we're progression be to little kind the of got any thing. might what going are kind on kind arms this on doing the but issue. other we're where and what, global people of obviously, watching I'd other kind about are a what And this getting leader mired lifted, see green are been this you've that second a kind from doing we've still spotlight post-pandemic this, is, kind got our to concerned trying a question geographies you towards leadership on of you interested see out as of in Thanks. vertical if vision Singapore you What's think that who be standpoint? a get are What's did going it down? you've of of around power. of you now demand Moratorium guess I a we comment I COVID, Could new

Charles Meyers

towards our and our workloads And, wind the time has job relevance can strong. one, think I of then I seeing transformation, movement really just sustainability so is really, at has super not think that or moving cloud the they because to based I on you given close is a have well, in saying buyers. as it investments team we of weigh at else, every competitive their strength tell first great a this, we're tremendous And how verticals, and about like maybe so essentially, to we driven how think the say is making in that across articulating it. Kat it by relates private side back. the this she's to, about that, think Sure. infrastructure, least David, think at and those they're will really I critical keeping they digital source it's in between that's scripts, mix I hey, advantage, last strong the as our been board saying, we're ways strength sales as I looked Keith, will and accordingly, take And I've seems execution their done frankly, and like up. few that somewhere think people and And infrastructure, really the

kind it get People seem I be team that has that I we're move in to just sort have an when tell and the pause testing saying, we're in when we mask a COVID, relates that. an exposure I downs, anywhere would mandates think ups around due to obviously, dealing different sort you and are people, As constantly and facilities, you've are with and of not and dealing mandates, is, challenging, of that doing it seen, having to we when we as really with they're seeing so operationally mode that, regardless. to et and to on they're of done amazing COVID. And forward, be cetera. we oh, say the the job stuck powering got we're that wouldn't through says, world But we

to And broad we've want so seen really Moratorium strength, do and think Keith sustainability questions? Singapore take the I you

Katrina Rymill

moratorium actually center we really kick in over you, That on our front targets. of focus excited sustainability, our I'll you're very based we're see actually that science commitment off. neutrality, rolled lifted of is announce climate strongest it Singapore. the first a the tell one And chance in to I'll markets. a David, Yes, to data try XXXX, highlight by to us seeing get to this, to out which we're is

green our customers around as a We've chain. going Now deep of like renewable customers. help as broadening those we rate a year, that their returns and of whether a very to seen coverage our because them asking is energy this, supply a commitments as looking investors it's includes at to out all about customer we're with just well our for really I up to to now underlying to talking run around data sorts there's certain customers which in uptick XX X,XXX reaching areas outreach talk energy efficiency, program, am used enhancing huge well, love are projects, green

coverage. of to all German Germany, have sites, green as Germany new on getting the react markets on facades in And it's new of is you're implementing you us the a this. well believe as there's And markets if certain like lot whether certainly they it particularly is focused go around an any to are well, heavily seeing our European opportunity. areas, you front world. of So focus And them, energy renewable

think you'll to lean in see I continue around this. heavily us So

Charles Meyers

comment, deal I that Yes, end. that's Talent well. for in the talent seeing as things maybe so But doing committed companies the for be and sustainability one wants board. particularly to interestingly that are working and to true and we're across or more believe big right the unique is a are they think

David Barden

Awesome, it. thank appreciate you all right, guys. Really

Charles Meyers

Okay.

Operator

question next Rollins Michael Our from Citi. comes of

Your line is open.

Michael Rollins

now? hear me Thanks. you Can

Charles Meyers

We can.

Michael Rollins

bookings from channel, revenue or they your you how channel, going I'm second of curious contribution two expanding questions, And unpack from pickup for if indirect you taking the for the force? other organic come once look discussing much strength from if areas the actions, they that channel. might been do services lifecycle we strength should mindful experience And be thanks I relative in some for first of as demand of of be the sales or number the Are I'm back is adding the you've in in that that direct? in and just more to their logos could, indirect relative well, versus the annual of? question to currency the now, customers the versus pricing to revenue evolution if of characteristics direct the the that the how target, had can curious, Great, quarters customers with coming their then any through get different to guidance, some services you've there's constant versus

Charles Meyers

Thanks, Mike.

obviously sort a a major would not it's organic we're we So say also, on factor. environment, but that that's did major in some a price the of a price not on a ton constant not the I there there's power actually say, currency is associated combination there's factors, increases but rising guide, factor, there, a, that that's front, of in with is

seeing obviously, that's it's force. small driving mean core and really broader We the a traditional are the that the so business services portion, right, business, is outpaced I digital broader but big,

respond into driven to win, the And that well, on expansion really momentum geographic to GPX business, going core multicloud is great. been are, are sales the customer. I and doing allow that's going both mostly I of to hybrid When selling outperforming customer in that to and think we're digital and doing building but momentum And execution is exception. doing without excellent, the we're is we think it's I how services, Bell in really strong, opportunity. I think core, assets has is just trajectory evolving is just so to we're great, mostly demand we by point our geographic acquisition the the us the and about but And also the excited again, advantage, [indiscernible] great, we needs so see. continue

the better at a say a solution I off terms they head selling in often In customer, with very already oriented that he's Equinix. to meaningfully working channel my acquired channel, channel, something because channel with come done typically, not a top of we're customer who's that is mindset, partner would different,

is quite And so the the mix would business good. through of say they channel I it's, that

at they customers. customers, in it's So grow that really sweet channel writ I grow They all, as different. as large, meaningfully they but that's true look think faster. well both non-channel But don't, acquired they don't of spot. newly And think I

don't to to the I we're sure dividends they to So of we're that, pay year fact, right on the of sophistication and that continue is ahead delivering is think and the channels on segmentation, through think the right services one really right to those margin it's segments the differ going going continuing to for priorities line. sort revenue I increased and the both in to front refine line dramatically. But look make that continue our at the

Michael Rollins

Thanks.

Operator

Synesael, and Company. question Colby comes from next Cowen Our

is open. line Your

Unidentified Analyst

Hi, this Two if Colby. for is questions, may. on I Michael

you're expect to XX% the that you would what also about XXXX? your company on see business there, we've just in Americas turn latest of that's acquired given deploy center did data assets Africa, just then And how opportunistically have Thank interconnect the Telco, real and for in of that acceleration another reportedly get get namely in incremental quarter, question wanted also by you thoughts still you thinking one leverage that seen can year-over-year, key M&A. And global sale, you growth your fourth from First peers. to there's large you. wondering second

Charles Meyers

been M&A say successful at continue we're bring our in markets at very in assets. to what key going it, and extend On powerful the front, very I to critical and interconnection to We've is opportunity guess I scale as to a is, reach, believe we continue an M&A the it tool business kit. in look appropriate our

turn it's as always we're we're in those a multiples really going private burning that important, that, it's processes, not are to that probably of could that leverage terms in on we're level in you a not a of lot that going particularly And overheated we in the But available maintain leverage, with And flexibility, so think, discipline maintain of our actively have markets deal. discipline. do. win means markets of yes, balance yes, we the to to sheet involved hole in I that every argue And pockets.

drive to it, to the to always generate happy continue to and allocation best best where it put that's our the have we're is strategy So And return. use returns the it we capital in think business. we can

following digital the quarters. will expect we a of basis. don't do is Americas, I six excited you're execution, I other over demand piece demand our your across And from And typical strong areas sort And we then emerging profile. more this sure puzzle, that, think in or transformation actually team, guide of and more But team I incredible apply be we and to really the said, M&A team, front. But sales but momentum ops to that John's an that I'm super as take So, do immense John what five think and really them broadly last just a sort you'll us on on business. across the that the business of the of pattern, see, hear and and world. in year that America, Lin and strong capabilities over going course the from really see team regional entire a

you XX% increases APAC, pretty we're in of look there. to of in -- some rebound and And strong across is nice the X% saw in interesting as year the in XX% this Pretty darn Europe. in Europe. but at so the some quarter board the lap we beginning the America, it And prior that

seeing the the I expect that so, And strong -- in Americas. really board. I But momentum do across we're I continued think think

Unidentified Analyst

color. thanks Great, the for

Operator

Deo, MoffettNathanson. Our Nick Del next from question comes

Your line is open.

Nick Del Deo

Charles guys. for Two one Maybe question, taking you. thanks for one Keith. Hi, for my and for

Or Africa at asset I'm a sure you all years capex? over up pick new end in then that one for most notably Teraco going Africa we've years? Why some South for few kind main in been to digital for the for seems of seen at moment And for lower few a this be best main trade? them, and capex? like Teraco? the And of range First, even a is your to it's end Keith, it's was the towards expect, ago, looked catching a buying as up to Equinix? that alluded of a in deals on of time? is now. buying path recently, one there recurring maybe target normal coming recurring happen Should you we didn't And low with It in very XXXX.

Charles Meyers

over we're an we a we're great But market. a to South Teraco one. specific is years. we're asset. it comparisons going on take recurring side. any a let business. going -- And drawn very value. and between about sort Look very you -- It's active main excited -- deals, because draw -- we me Del the it of Cornerstone Keith to over and attractive continue I'll is provide is a it think to one I'll from. and wouldn't and Africa say in market Africa capex continue think great it's great they And long-term build as we're team important market, to I good believe different hand at any that's more then that is know, Africa's definitely to I evolve many And

for to strategy. that so is going return. of And be then continue South Africa the part that to to we're ethic. be market will to going African go what variety paths in thoughtful us we're to going any that other in work cap a find way. we're Keith of And -- competing recurring a one take there's didn't to market. we're And And hard our we're at has committed And

Keith Taylor

another it’s so recurring And capex.

it's of and dictate what sort -- portfolio, we end to coming Quite so the into that on the tend year are 'XX. recognizing as depending the of going lower We timing have bit, of we range timing, you, capex. fiscal to we the the are just for a Nick,

one So thing. that'd be

approach, QX is X%. and is there, number of when roughly saw to you an X%. newer biggest think the bringing better of be to the to and we somewhere the the a model, But about and and course, then steps reasonable made, position to a the the roughly the accordingly. model I I that number into have through capex elevated look like your down timing about we're we'll X%, to as and to thing X% that you fair of think has long-term current portfolio would relative year, fairness would point. recurring But it result, so new the it X% Recurring revenue think And really level portfolio, as in capex guide in that the and continue assets QX between you that be continue you campaign. a of I in feels

Nick Del Deo

you Thank great. Okay, guys.

Operator

Markets. Our next John from question RBC comes Capital Atkin,

open. is line Your

John Atkin

then one related questions, and or questions EBITDA of xScale. kind of couple a on Yes,

those how on? just what XXXX What in by I factors margin was about that So interested kind EBITDA? can And be the guidance? in some drove items that are mindful region? expectations noting then churn the And your in that? keep are and And development are drop the of of the think embedded we what Europe are special to

Keith Taylor

I sort as fourth were comments in the dollar quarter, churn. through eliminating the and say, alluded these as strong and many Well, reason ways, revenues his X%, was I first a prepared for average to churn revenue level. I to our business for In there's was on per very of was X.X%, to think which on the to remarks, said, very, the pass in in than foremost, great. quarter low is, it XXXX. no Charles revenue, And part rates churn the churn of like so relates

a shift. what we As used going to think meaningful there's that's to range of we X% We've look not sort that into happen. will indicative X.X%, be XXXX, the of to of gotten

to is meaningful update this we'll nothing fair there's that at -- it. you midpoint at probably meaningful, there's approach that will nothing a John. guide But continue you this differently on the point, And think stage. I

that look As on implications a one to there's EBITDA, of European at in QX, you QX going timing number to costs is of it just qX, specifically, are more got relative add we German things but relates quarter, of a example, seasonal if the QX in fourth there's consumption. the Europe, until particularly that got costs with winter rebates you'll the power you've and then the into higher -- quarter, higher you've in utility in third months the

the EBITDA the be trajectory to to get power, the transitory by our probably to year. still of it of some at the it an target And result, the second services margins. made well that the has just And on. specifically. a We're would hiring different matter. Asian in very so Charles going comments look about And your increase that XX% there as an there half belief margin, a And related that costs when that's and impact was more path other then the going side of we'll on was overall, notwithstanding, quarter, nothing you our but much is fundamentally on

John Atkin

hyperscale level just you high participation seen as in kind sector, the xScale, of of growth your as number a curious assumptions, on platforms? and pricing, scale view terms pricing the of of level then, well hyper how curious, then investment competing by And and we've Just that update in CapEx? given seen capex as well, assumptions your any demand on the of demand

Charles Meyers

seen the one build the continuing design those on a and to sourcing to strategic really from also the we've on side. sort try be perspective. John, those out front, some on sourcing working Yes, in costs, increases of get just we're but by design to of design, then offset and to continuing front, some accretive And striving

So we're, returns and stable. relatively we're think I seeing

is I stable. think, pricing aggressive, but

of in plenty that but more there's I the -- there yes, supply is think market, there demand. even

market would quite realm demand the It's supply I in xScale say, right specific. balanced chunky So very now. and is I very think,

teams I But it's uptake, different our well. executed thus really in been we our has than so mean strong, lease business. that. as little feel super a good And you've far, bit up seen about retail And

of the And lot customer so down demand. lot coming there's a road of and megawatts a

everybody an XX the of I pleased business. exposure important gearing xScale, of that on And So piece on of capex, time, that we're remind to have it's side just that I one for and mean, the capital is, exciting we the think with right. our performance that, to it's

because So, leverage of we're only there. XX% and it, always there's involved

and to that so have a really so. exposure modest overall allows capital relatively And to it us

side capital work on stronger really our the putting to with of bulk we're John. the So retail

John Atkin

Thank you.

Operator

comes Our from next Stanley. Simon question Morgan Flannery,

Your line is open.

Simon Flannery

very Good Great. Thank wonder could the question. I margin I much. if back you evening. come to

times think just there? see XX% the it by the half Is And XXXX? goal? up that fairly So couple given 'XX? move Are other you puts here going the to reiterated second You goal you of linearly that we from 'XX? us from we there 'XX about margin long-term on talked trends there, of a Singapore? Do through and as takes to perhaps you have And improving then with the gives much how what about that? visibility clarity 'XX, mostly help into

Charles Meyers

the as the from factor XXXX XX in big and say of I bps margin the the year. is XXX what that, we well, associated got year-over-year Yes, vPPA profile last yes, compared benefits on you would bps said, Singapore, with the I have on

And in so factors. margin down, two X.X that that's the bridge, between there's step in of there explained bulk mean, I see it, those can you a the of X.X is

and there's series investments really the a and operating not business. the in so takes puts of and expenses leverage is solid rest some And with

on drive the driving environment. which in so mitigating It the for to the a strong And be is operating it impact. a team, focus John sandboard pricing operating and it I to key business, the scale is continues business. say, and would going is then leverage And the the

our environment, demonstrated we're continuing So pricing solid value I ability to our to a customers. think distinctive deliver see we've

as so I ahead goes, degree the go And were pricing. to on inflation the that and the prices -- offset as we're mean, some going of some

So how on And will it from progression solid is I from those it to think where sort standpoint. all there I factors, or some there margin not. goes us of linear wouldn't guide and lead

on it's we're was level which of clear to how some always as and to we level the maximize And as hard, think we a heard degree, a of is for the materializing. judgments I I about make going part to in do you gives again, is creation. loud business, to, sort target. by us us is gave XX% confidence long-term investments XX% leverage going confidence our to real really Singapore But how dug operating think And increased and of value the what us in XXXX. dynamic that It catalyst to reiterate that do. confidence an I about about think

Simon Flannery

thank you. Great,

Charles Meyers

Thanks Simon.

Operator

Suisse. Credit Badri, Sami from comes question next Our

open. is line Your

Sami Badri

rate adjusted this is a picture can question. to prior think has adjusted by very on for you if of at in to I'm to XX%. expectations. your And long-term people's to looking definitely would just impact, that for or the making me some EBITDA long-term EBITDA talked trying comment change. was there you us? you thank X% utility you or the take for margins same-store And little about road above that grow your where you margin able a came that about bit Or probably and Hi, vector The the comments no of much I'm unpack XX% to same-store XX% grow growth Singapore get to plus maybe growth. XXXX. And be

Charles Meyers

Obviously the move interconnection. in range. into We think guided that X% on continuing think to more drive with really on the business, answer Sure. range bit for said, little pleased locations, is more as sweet markets. fabric Yes. of we've interconnection, but expand short We're into of recurring X% don't depending around a those a to business, They up it factors, overall, that I no. stabilized assets. typically X% the revenue drives spot to continuing we're with variety sort I replacing continuing strong, churns in a

don't it, to think going that's on I happen I to so But results. XX%. the think, incumbent it's that And have drive good us that's to don't get to think I

digitize variety that our we will ability a to to that there's the trajectory business I us the need think in XX%. to of I get on of our -- give that we simplify, leverage business automate, examine as sources our think operating

Sami Badri

it. Thank Got you.

Operator

Ari comes question from Capital BMO last Klein, Markets. Our

is line Your open.

AriKlein

some some Charles, other in What you you higher just the on mentioned And these you Are at also prices hedging been where hedging at Singapore, has roll that? side are passing you. customer off. prices? of response elevated, as of look from hedges Thank challenges those the the markets, costs? the mentioned you on energy in and

Charles Meyers

rises it markets, same excited undoubtedly, Yes, boat. in is, reality is certain everybody's our different. contracts if it. the customers that's the to us And rate. the The rate I regulated baseline customer. about of pass look, all it's the expectation that exposed We're more than allow aren't to mean, a in the reality it And and deregulated that, percentage, the through. is But

so they it, they may just -- And that's an while not expectation. love

gradually. rate I think, little have you and to volatility, these we've adapt in markets, allow environment dampen deregulated complex, in more rising which multi-year a more it's hedges, essentially to a

in following so it hedges either a, kind up, range. what the we've plus down seen. And or That's chasing works hedging your a work because a typically that's you're minus way around of either, you're it or

to into so over of implementing hedges off, into those and as the time, we roll roll new sort years. future I hedging going as out gradually market it rates, hedges And we're think be

remember, So, this years. been we've many, and to doing many it's for important

we'll that the that see right, you standpoint, other in relationships, and able could adjust a that some it's are that so But from your the markets if there some you and new we something customer a long-term potential have long the accordingly. volatile our from doesn't about always you if feel rate have on been leverage. operating reflect increase price with relationship price increase, pressure and more we to then really And not we've make And as And increase customer spiky. were take more offset mean that that that. that to definitely dynamic, lens then judgement if a the bridges,

be to scope and where of continue to the really this an the the scale that helps area case, us. expect we our business so And is

carefully in manage yes, that it. feel we as see, there we to be deal customer with I can them factors are with mind. the that there deal through we confident so to able And have and think and And we'll out you with,

AriKlein

pricing are into if standpoint? Got tailwind energy turn so that it. guess can a normalized, or I those permanent, And if increases your costs price from

Charles Meyers

good very Yes, question.

give some Here's But back and directly new customer. characteristics deep the deliver increases, that set and we sort what structural. the to to I'd in more those more to customers. then utility, are would wouldn't be for new because I the of a volatility, pricing other in say, adjustments associated inflationary we're there's confidence a want value actually to deals, pricing broader If permanent. then we different I with of of as types baseline markets, retrenches, there of view price Those temporal implementing expect it that

in think them there a structural is for new points I those that new So dampen future. out are what level of been -- that are we and volatility more to but power to I have wouldn't But strategy allows think terms say our so price we're just hedging all prices more I -- we've we deals. are definitely regardless level that us of happens those typically, hedged, volatility, of more do that think going do in of on really seen

AriKlein

thank Got it, you.

Charles Meyers

bet. You

Operator

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

Equinix (EQIX) 17 Feb 222021 Q4 Earnings call transcript