EQIX - Earnings call transcript Q1 2024

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Operator

Good afternoon, and welcome to the Equinix First Quarter Earnings Conference Call. [Operator Instructions] Also, today's conference is being recorded. [Operator Instructions]I would now like to turn the call over to Chip Newcom, Senior Director of Investor Relations.

You may begin.

Chip Newcom

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

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

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

would President; available and encourage supplemental the and our we you Taylor, Officer. us and information certain Keith data. on With reconciliation on provide like time to on information. today's uses measures page Equinix to other Relations available most company current call. from that made In list presentation to and website with remind the are to the for IR discussion, a provide release today's these our of you today Meyers, comparable website post most measures to We accompany CEO page the addition, in a We've GAAP about financial measures designed of directly information a non-GAAP and of check important this We the along measures those the why conference also on our Equinix website page reasons Chief the Charles Equinix' www.equinix.com. Investor press regularly of time IR Financial we'll at

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

Charles Meyers

our strong on We any more deals to all both and X,XXX of a quarter earnings than hyperscale the the XXXX revenue QX favorable our S&P performance dynamics, completely we and X,XXX resulting start for to streak than and of machine. and rates, Chip. XXX into both by you, quarter leasing welcome driven the our company. record, again in such our accelerating great closed had And customers conversion call. more growth, xScale top-line churn, robust Asia. longest in of saw bookings across Thank key XXth afternoon the consistency demand translate go-to-market Good lower-than-expected pricing We QX scale EMEA highest demonstrating

and While we AI, powerful operational recognizing customer some serves particularly role remain optimistic of continue initiatives, adoption in our of given in expansion, to rapid driving corresponding see economic catalyst and about environment ahead. caution, they economic customers an broader Digital is as strong, the pivotal remain for level and to our fostering and pipeline the opportunity operate steadfastly committed forward-looking revenue transformation, we a growth of the digital long-term efficiency. uncertainty, play their

the chapter infrastructure has building productivity. new unique more help and of of operational experience is and go-to-market to we're Merrie more accelerating experience, team with the brings record that thrilled digital joined routes track visionary powerful, make to drive to more Merrie customer a leader and next an enhancing Williamson customer continue chief growth we As officer. revenue skills proven as and accessible and our our and sustainable, market,

our ISR than Green our Report clear the which were that This solar million published their sectors sustainability pleased our facilities IT supported continue in to improving decisions. the to project first this in have advance by Annual important front, sustainability megawatts to have Gartner infrastructure seeks in of organization. prioritizing PPA their sustainability metrics provide companies usage parallel, we the that another with recently us XXXX, we future bold agenda, to by It's We estimating performance efficiency over X.XX, all In projects, part an X% with will annual energy to continuing with year to to April, grow and high-returning XX% digital seek by of our across continue announce critical PP&E consecutive power On CIOs continue growth. PPAs by plan our and energy of tied growing in performance effectiveness. are ninth on markets, and first measured that in additional energy In of lever average with existing XXXX, year in renewable support renewable clean to marking line coverage. our improving assets. in will we our market. in to In efficiency XX portfolio, to we Plan focused Singapore, more Singapore's projects our will XXXX, clean business drive highly high-impact coverage as industry cleaner remain $XX over Equinix gigawatt of continued sources. of over support now XX% XX% we sixth leadership year one invested our our new stabilized our is energy energy late strategically

now our facilities, the centers support We and AXA our than more ready of adjusting important continue make standard. for new enable thermostat to this progress with also the of on operationally to temperature industry XX implementation strong data in

on stepped performance. Turning due to growth revenues X% X% and year-over-year driven operating to than rates X, Interconnection as quarter are share EBITDA constant-currency our revenues basis. AFFO per a year. and year better was year was normalized same were Slide up all last results These xScale over fees. recurring meaningfully $X.X up revenues strong the over for up X% expectations strong Adjusted depicted by and billion, QX on

portfolio. Our performance our unmatched scale and services reach continue to in data center drive

footprint. across capacity, currently underlying strong a see representing cabinets invest for of across major including xScale underway XX global retail of XX builds, than than end XX,XXX We growing more and new through demand infrastructure capacity mindset, we xScale markets megawatts in of delivering projects our duration long the XXXX. therefore XX in to XX digital and Given more continue scarcity have and we broadly XX countries, the

added we quarter include Key object growth. growth globally, Madrid, in quarter support three Equinix continued new service all expanding ServiceNow, their workloads, new and storage multiple and powering Frankfurt, with This their GenAI Valley. multi-market technologies, provider cloud including locations wins this in Osaka, regions to across Silicon expanding a continued Wasabi projects

key our on continues cabinet services, and mark-to-market booked meaningful pressure a and year increasing cabinets in per cabs momentum, digital at over to delta and between this solid for were MRR to Our power density the densities.With in churned driven normalized retail by business interconnection year $X,XXX rise constraints increasing basis remain in constant-currency attach rates gross to cabs and certain $XXX markets But continued power strong capacity near-record booked levels. net the our kilowatts respect metric. and additions and building continues to

strong expect cabinet capacity additions, of as bookings business. the Given long-term half growth and part the billable upcoming continue for increase to story to cabs see we second in growth and the

we In quarter transformation adds nexus year Internet higher and dynamic and of healthy on-ramps metros. to the potential around a to nearly a XX of Turning we more buyers XX bandwidth come specifically. logical by churned continue and X% native into one saw healthy Madrid, Americas. point us our public and second spread the architectures, In on these hyperscaler across up in with XX% XX% $X.X share translate with on-ramps the that we more to on where for year, to will franchise, unique market to our collectively roughly gross our We're native this nearly IT with will digital technologies, platform. world. exchange cloud of up projects billion operate.We cloud supported QX the centers our quarter, across model new AI. in spending key connections, with emerging pricing markets represents We interconnection and alone, XXX,XXX to our the private on-ramp interconnections the of and between XX% terabits XX% the demand billion innovation. bringing the part peak moderation platform business interconnects unlock of industry-leading average an advantages traffic quarter adds we remain reach quarter retail business in strong additions. than of annualized customers representing consolidations XXX as enormous to in seeing to services across led sellers new fuel broadly as into continue $XXX position revenue a services than with of global confident see by to cloud now picked data cloud GenAI, vectors our over total of more and hyperscalers spanning portfolio, digital This than and This year drive Gartner interconnection deployed and QX, multiple growing a needs together X,XXX XX durable including added Equinix's customers the in cloud integral have per remain of grow an deployments cloud over and and

X Osaka This productive including these our cloud players XX% some Since XXX continued megawatts last capacity globally XX underconstruction as our we the assets, translating Importantly, xScale mid-April. XX nearly in with total into we're the pre-leased call, our and megawatts to Osaka pre-leasing demand pipeline our channel meaningful remains are also market-shaping needs a to and AI to megawatts we've xScale end-customer approximately X, robust meet leasing leased, hyperscalers operational go-to-market brings and making most strong capacity Frankfurt strong momentum program, drive incremental as quarters cloud In for seeing an momentum in of and come. opportunities xScale AI, with private needs of partner and leased partners. our to hybrid nearly across activity. XX, earnings of

mid-April, looking of capacity progress portfolio, on U.S, Real with this Fabric services expected existing our out. Pacific to those combined Fabric, use you experience requirements. of our cloud solution Network leader and joint in significantly additional VC more business to engineering making opportunities of building security global on the venture Metal in facilities When exploring Asia Additionally, U.S. planned the from and practitioners. Edge data improving infrastructure support Network of America, this the EMEA Equinix's cloud-adjacent digital xScale Wins a XXX first than the greater recently than Edge in online analytics Equinix for also Latin in to billion We creation infrastructure to the megawatts business. In their storage global Shifting investment digital our for Metal with more JV to announced completed solid will our we the Fabric, AI our overindex learning fully CrowdStrike, the SVXXx bring PGIM and we company and see ecosystem across teams and to to relative customers. and interest users. xScale Estate to $X to Equinix need, for XX combination Europe, new updating broader built joint and asset. customers look power when integration than ventures the of in support included proximity portfolio education in and good across continue for xScale quarters. platform storage global AI coming provider rich forward We're developments leverage an And on Metal out

Our with delivered of partner bookings over XX% solid another deals channel for program accounting gross influence and new and XX% logos. channel over of quarter

industry hyperscalers see of Kyndryl, segments Zenlayer and mix like Avant, of from with a the services. and wins broad continue Dell, key to AT&T, growth from and across wide a other partners range Equinix We

a into its partners with well platform. and including consulting had are In delivering As sell co-locations Johor. efforts interconnection QX, new number global as our in extending a to reach into Lumpur, fintech the we supporting wins logistics we our Zenlayer to into Malaysia, Kuala of accelerating firm firm, extending solutions as expand markets,

its to of a from sector. We who Equinix also including Canada, selected with win saw largest customers Platform also the in public Kyndryl service some

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

Keith Taylor

Great. Thanks, Charles, and everyone. good afternoon to

strong across the our As each financial delivering better-than-planned start to year, results of Charles, core highlighted a we by had metrics.

quarters Also, all year of three first $X,XXX across MRR momentum, customer the our to deep better now as business positive a bookings to foreign and pipeline plan dollar. continues expected. strong our the to metric remains the execute well for leased regions. momentum were we assets of with the very meaningful perform per the pricing despite meaningfully net continued relative the weaker Global time come. our having regions remainder U.S. for eclipsing to currency of each for date to show to xScale pipeline ARPU With forward-looking another continues cabinet, dollars, We churn, measured and look Our against lower-than-expected our U.S. opportunities our in year. five than had actions, to

many means customers, from our our reach. global To everything a as XX interconnected is Equinix's achieve center the capacity to our competitive But in all, at customer power the we reviews seconds of we being monitored our ensure up running ops marketplace draw on annual customer and and an do peak can but digital shared know, reliability availability six-ninths competitive support advantage.As Equinix's customers. average our approximately also, and the average. for regularly commitments which third this strive to thorough ops advantage team facility performed ecosystems and deliver against putting global capacity a and to to year greater teams both our our outcome, and of the derived Now, than scale you industry-leading both operational our of example, is

As commitments, additional the commitments we're our to bookings is why by of the our XX-year and substantially Equinix's delivered been committee previously the professional in our XX% that demonstrated with has and not than history, investigation conducted representation also its greater from value company's appropriate in share these on has existing team assistance pleased historically of and findings resulted advisors. has of has which over has shareholders.As you, delivering any Based the an to accurate completed our was update, committee customers, concluded announced has of reported new directors we've of reliably investigation, throughout deliver had board audit our been accretion The of independent that audit audit nearly sustained operational practices an reliably and able independent also to our reporting of come against activity to the the accounting customers, third-party the its financial committee performance. discretion operating of independent scope application the full way. the a on investigation restricted

part disclosed, errors shortly identify a received accounting the to U.S. any issued not Northern this previously District we seller or subpoena As or committee of the or report, measures.Also, of did previously Office of assessment, the non-GAAP Attorney's from restatement adjustment the an inconsistencies statements from of audit financial as after short the requiring release California.

XXXX, XXth, Commission. Securities we subpoena a Exchange Additionally, from on April received the and

We until let in are quarter. on and both Note growth the on appropriate to cover not to a normalized do highlights all so.Now, such cooperating rates matters are this do constant-currency with basis. expect the fully and subpoenas me comment further section from that

upper As the global depicted on $X.XXX were Slide last X, quarter revenues in guidance same constant-currency billion, over the up a range year our of half on X% basis.

and million As yet revenues given QX, percentage in remained the and X% quarter. when strong our April, due our headwinds in activity $XX rates a the elevated non-recurring expense. to performance of last to xScale when a expectations due Global lower-than-expected FX are dollar above our EBITDA, activity or net increased our was revenue $XXX net the AFFO prior due utilities of $X stepped to the business leasing quarter down Global end as hedges, X% and included spend. to our up strong X% due step net net U.S. X% compared of headwind level timing year EBITDA of $X the $XXX to to the FX FX expense revenue of expected, up adjusted APAC guidance QX bookings revenues, quarter. QX guidance same adjusted still revenues operating same our of million, and quarter expected non-recurring interest over lower guidance FX range strong of related quarter.For and over million million sequentially our was the QX XX% rates to QX costs. and QX revenues, hedges prior the above our to up to integration QX xScale of million included last over prior in compared year top

a years. AFFO QX was had we Global rates. planned, our consistent guidance $X capex spend, headwind at QX with expected prior X.X%. FX than seasonally prior when better million compared included MRR As lower to recurring

average X% year, the range. X.X% MRR the expect continue quarterly we to to For churn in to full guidance

sector through to region a regional our On Slides additional Metro. the and full particular regions both our performance a EMEA highlights, fastest-growing public global activity Miami platform. interest in Turning strength basis, Culpeper, the York X region covered pickup as normalized to by at our as in a results the the Americas metros, are and X. quarter exports year-over-year was our had at saw followed growing in XX% great strong healthy X%.The soon-to-be regions our team New these sold and in other APAC by on with Atlanta, bookings strong across Americas open the We capacity well led as

business saw markets.And activity quarter Our and mix metro structure, inter the And strength as our increased in delivered quarter gross Tokyo larger our opened recently and largest medium booking Pacific Hong focus footprint great quarter, and continue from with in their on Asia please increased an Inc. Paris optimization Barcelona, at Slide of in including finally, firm and continued efforts. deals. products, customers Fabric including Kong, In network our now refer adoption X. bookings region Malaysia region momentum robust Sydney. EMEA a In strong we had the connections and Frankfurt looking markets of in Equinix saw with to a capacity Good on services to pricing we capital digital our quarter, strength including the

annualized remained EBITDA. X.X low our relative at Our net adjusted leverage peers times to our

approximately decreased cash balance $X.X sheet over billion, balance billion. Our of unrestricted including $XX.X

offset than by cash flow quarter-over-quarter operating and strong dividend. quarterly growth decreased the balance the cash more Our as investments cash was our

relates our to billion of currency year.Turning to and we and our $X and the timing, given size sheet plan plan opportunistic as debt this balance future X. liquidity Slide position, we remain noted market of maturing the it later previously, when to capital activities, including to As refinance strong

quarter, and of $XXX Paris. recurring last call, For $XX projects capital we Mumbai earnings seasonally expenditures City, in three retail the opened were capex lowered million. Since million including our Mexico

where in XX% expansion a the in invest land that for buildings also purchased our to have owned increased operating XX owned for XX% we Dublin ground as quarter, added longer. redevelopment category IBXs to investment asset highly a land new Revenues than this owned recurring been to our also and revenues, current disclosures, our valued We Starting lifecycle X Chile. well years or will X X, capex more retail of stage non-recurring or our from capex, referred enhance Santiago, select attract the efficiency we're Stockholm that of meaningfully evaluating as at capital development life assets be category, intended with long-term in opportunities of Mumbai as to investments the are leases.Now, and to assets, and on entering of this track extend economic operating capacity, assets. in to of standards we're these to and facilities spend investments

redevelopment first spend estimated that recurring. in original the into in categories northern early primary ecosystem one investment, opened IBXs this Total project home Our project capex XXXXs, two on our Virginia. our networking broken to and redevelopment $XX will of approximate and is of million DCX, DCX

The stabilized be meaningful portion flow to recurring capex. revenues, result revenues given yields. capacity, anticipate IR typical generate additional will of asset portion the expect the roof the the this the asset, existing DCX million that investment, and well as capacity cash maintaining our replacement, customer we $XX remaining pricing our of as will for and demand to in such yield space high power current additional as and, that environment We favorable categorized and redevelopment investment above which relates should an

XX. Slide to moving Now

years QX, exercise, asset refresh Our IBXs. returns. prior capital in increased strong have the categorization count deliver six IBX net continued Consistent we of stabilized and our a with completed our investments annual to by

all generated year power XXXX. now assets basis, and asset step-down lap price on Our summary XX% XXXX increased XX in bridges. cash-on-cash were X% normalized over as and a of finally, a Stabilized refer PP&E rates for are and recurring updated on a XX return constant-currency the growth actions XXX-stabilized revenues please year guidance basis. through XX% invested.And on constant-currency the by quarter-over-quarter we Slides gross note Do collectively utilized a to

year guidance maintaining XXXX integration expected $X raising per our million revenue to grow of we're continued XXXX capex billion XX% XX%. to underlying AFFO X% million strong net XXXX, underlying XXXX including lower top-line our $XX AFFO due reflection range year due to full our with and expected of and capex lower momentum. between to is expected $X.X our by We're between X% a and now interest XX% compared to between is raising outlook adjusted the X%, previous spend. the $XXX now recurring to million underlying guidance We're spend. share expense. of grow by $X For billion growth about EBITDA to

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

Charles Meyers

value Equinix, In our Keith. our leveraging and platform market-leading digital fuel our Thanks, see transformation. delivering customers our from their our our to to scaled continue interconnection commitments in compelling platform greater-than-XX-year we closing, track derive on investments of ecosystem, digital record global reach, superior

I both privilege we day in the on a spend to they delighted and turn continued for to and to embrace to we'll Q&A, Equinix, shareholders. has few we an clear in and We architecture leaders important accelerate are the fundamentals and of continue business, hybrid as of and partner ever reflecting CEO years, showing integrity be to digital a to optimistic as be we up minutes customers, financials strength are a my AI last our and to highly our as our In on every that our pleasure of six as our investments transition. been of see the choice.Before want remain employees, multi-cloud service it the the confident to

thank we I'm Adaire inspire our Executive full teams the our CEO steps skills, part next Peter shining path continue to a to of board. evolving extremely let business in the As proven experience, capturing to to forward as needs Van also I to active she XX Equinix Camp, over as an the with he of world.So, confident is platform stakeholders. team journey. broader digital him unlocking the quarter, deliver with moves to Chairman in our opportunities our of take of into to Advisor later on example I'll me of ability stop and this Equinix both value that this digital up look role look the brings and the digital the Equinix. partnering from I ensure Adaire further can working to advantages the the that and distinctive and the world's to and customers, years, growth leveraging as support company our Platform to collaboration Fox-Martin power infrastructure and of interconnect and passion it trusted magic that for harness create the leaders to the range our chapter executive infrastructure Executive leadership the extraordinary like a Special questions. there the of I'd Adaire I need as the driving creating foundational new with forward enhances and last the open and to continue accomplished look our Chairman role. forward transition we to Adaire with sustained an

Operator

question first Atkin Our instructions] will [Operator come of you. Jon from Thank RBC.

Jonathan Atkin

the underwriting. that difference I a provide you've and you're like in and XXXX, Any interested might just of in seeing profile? returns debt you're given And of cost whether wondered looks due of non-U.S. then, in what jurisdiction targeted senior it what demand notes billion you're XScale, cost got terms billion thinking $X.X year, a this $X terms strong of advantage. in refinancing just late due coming unlevered

Charles Meyers

costs, the add or piece leaves the are are capacity right, mean, in us with, extremely firm of lot I think to think that the take over I Jon. piece out of last -- and well. you're Yeah, range were be probably a that several line I those seen we're the feeling seeing as We've well demand think pre-leasing returns perform that I'll I to of overall. that we're take to under quarters Look, the see do continue also at that second the on confidence refinancing. and there and last I things xScale, able seeing and returns activity we we and effectively in we'll then and with pricing. first think, lot is a both on and think a pre-sell kind Keith huge year above continues to I then cash very of underwriting that confident so of rising think and combination I where cash where level relatively we can

Keith Taylor

I And what there. just Charles add on to to Jon, maybe said want

enjoy a continues it's larger alluded important think to fee the that for there's stream appreciate base costs Equinix that I that higher a Charles to on revenue compensate to to.

as the point that business, about over period some there's I about So, it's they're really a we've that our cost of stream nonrecurring at model our recurring we return attractive, it's and higher when it.So, previously, time as mentioning only is overall, was associated a with I alluded again, than promote quite think of some last also that as as the you'll in see think Charles our to, it opportunity about returns, fees recognizing their a monetizing think attractive not investments and where and all-in partners talked over the get, think to I few they're results. profile, years,

hear a As base about whatever refinanced, I I'm Can think talk really to it going you rate perspective, from the we And do I'm cost, I as second, borrow really made the to is. for to it -- over me? we what can about different maybe spread. the because Partially, really debt that's the about you and a Jon. going reference want when to is spread it to approach the relates being here pause think

Jonathan Atkin

yes. Absolutely,

Keith Taylor

had our OK. Thank going conference a -- funny We line here. on you. something with

really that think the we it our going remarks looking I and where refinance timing and again, Suffice which about reference at more in we're currency prepared need the So, look the the say we at capital it between markets. borrow I we existing raise in we're and to spread, the different how to debt, made money. to it

expect, spread, XXX I And XXX so, base, on basis think is. we whatever where should I were, and the somewhere between points over you think, based that

euro, see in swap to depending it dollar, flows Now, spread. look, others think might but is, on are timing would we in we that on to say, you that just now, it it do depends think we And right might we're have why could we when of to The to will competitive. I and say good Suffice I it's enjoy last obvious a I spread I that. volatile in is really to just do comment against markets relative the are that's access for spot suffice ample it say, we the important it about transaction. but It capital. needed, execute the very the a talk where very reasons, cash think to

whether I this good year And spot. refinancing, think next of an as we're effectively we a billion. aware, have or everybody So, of it's think unused $X then year it's is I in also line really credit

reason, us. then don't a issue on that the markets if that as refinance for I and whatever draw for later always date, foresee there can an aren't at So, we but being

Charles Meyers

pre-leasing a underwriting in out the standpoint. strong, to we're I and whole addition play strategy to the expected thing from how it I as Jon, seeing continuing together little think xScale bit be activity up much just the platform strong, fits back would in exactly say of a we very terms to

very our with pleased value fits broader to platform with customers. overall how of the it driving in business the So xScale of the very in and terms pleased

Jonathan Atkin

pricing to Just unlevered we've would dynamic or given return for an low yields the demand think not? of be the unreasonable assumption that kind teens heard about development profile and elsewhere,

Keith Taylor

it's reasonable. think I

continue very, it's remain to the points -- the look I demand can and appreciate. is that to teens to at price And of to supply to appropriate I and range, generally you difficult certain the think, we dynamics different But markets unlevered pricing the marketplace, very, firm. think speaking, basis. will of one be continue so, things can going you here, supply going is lose when I into at deliver think sort course, sight, an sort broad of can't I profile, demand very think be a on the low have as you very of don't -- Of

get structure So, add very XX the transaction. on to that return with a doing that pleased we're as Silicon a there, fee announced we returns enjoy to on working basis, you hard can you stabilized position and really overall and nice business. structure what, Again, considering. of we're know really we the unlevered and can the and And an we deal type we're Valley the a that you're bring fully recently

Charles Meyers

Jon. Thanks,

Operator

question comes Del Deo MoffettNathanson. from Nick next of The

Nicholas Del Deo

the appreciate all any of of with luck work on far internal to Charles, and Any the went? forums best can you review, that time engaged I the calls and us those role. helpful. details perform mechanics years.First, new go-forward like aspects anything the spent the other they these the the over of back how or suggestions who be super for in is the Then reviewed you along regarding was accounting lines changes? would share

Charles Meyers

to AlixPartners, to accountants obligation in of the in we bit forensic it. the very particularly were led firm independent be, the audit undertake and led that's a WilmerHale, those. add that obviously, committee referenced a frustrating sort a that, investigation have they the report. acting then of as experienced allegations well that, the The independently. And and the conducting looked that. you one as obviously committee accounting-related that to we accountants, short matters that company, I'll surrounding, look the that Keith as can as Sure. retained forensic they law And investigation, in give might public audit our into an it was mechanics at, did, advisors as independent certainly And the

we our that appropriate and we to level while collected financial on to committee that results focus our understand measures we took accuracy place on the tried deemed results. said press release basis and in while those and judgment reporting, with GAAP were involved they and remarks in of as here, the an of a came the in the right investigation validate and that advisors. business, a the concerns people keep and assessment audit making again, both of on investigation and they to focused tried the confidence serving They that there non-GAAP And customers the back a those here. And that about information the in so, prepared accuracy alongside led the as the were

I sort DOJ, the in our which, the in confidence integrity investigation the large team, the our And feel with the and integrity remains to like we navigate great said, in so, part, financials. because to we subpoenas open, great feel I and the while of have have as outcome. of of SEC about really the I it speaks

there it anything there's you and to So, want I'll leave there, add Keith? if

Keith Taylor

No, Thanks. I well said, think, Charles.

Nicholas Del Deo

IRRs sharing facility is I OK. through hear. other what Keith, guess revenue details. the capex Thanks to from DCX I obviously, the a jewel might you associated you investments. expand that can redevelopment, that think Again, the for you guys. you great unlock for work those that noted center topic, noted those one you little guess dollars you're with and bit guess attractive on perspective? doing crown a a a to I going data

Keith Taylor

on one -- anticipate. We're is environment. It's going highest-performing want certainly, things. you're One, people we portfolio. in It's the of would we've sure. really of effectively And initiative one two really our is new a transplant do life heart and to further live than it doing roughly asset of the in extend this those a ones in trying working the a assets category Yeah, capex. typically is for been because to year, do a expansion what of

so, you It's the It's the of we of revenue perspective, do give range extend to going a it's so to get It's two the more an going a because revenue going that's million, substantial refer small. sense an to high things. not opportunities. already of XX% to life. to you augmentation think And it's to And XX% to something create $XX environment.

So will recurring the recurring -- to the that's get about line. the an But than so replacement capex and return a really talked it. in and the can we through will on other going doing things, prepared million basis of remarks, the $XX us for assets. extract it's the be better roof some fact stabilized kind that yield, go component, this a IRR value that is from $XX you The million,

gives you a it in XXs. the So, it's sense

of put mix, If sort still the was that in end-of-life stuff recurring the the to you're you decide XXs. into

sense reason making very, a this we're So, leave like type quarter. environment get make a it you part isn't The a of decision, want with, live take is three very we critical gives investment substantial decision last done asset. the over is in very you when a high-density going were to of is of to calling to this done. that thing Again, also to getting really two it redevelopment this the something we years I

of a out sense it motor. guts of a investment. It's you So, level equipment. like not taking basic it updated entire with We're replacing and IBX of the the replacing basically gives new the and

to XX one eight than So, we into it's the to and five a have should overall, those say than be something portfolio, for a $XX years, mix. next considered capex it Again, more could older huge years expect be fall just assets item. I invest things. that but to has to like think redevelopment not or million it six I'd like something over of three to you There's that,

Charles Meyers

that. a add just Nick, I'll color, little more Yeah, in

match said, efficiency of business, in, to where this -- of projects space and power, base putting come the -- unlock center, So, play in and really it project. either to hold, investment, actually we kind is feel that's another entirely here situations of this starts you're additional data And we're to power capacity unlock rising here, capex I is we usable big that on type as you're that equipment unused go off times, on because are, of is engineering difference you to refer dynamic needing can power, out where that of But density at or seeing think redevelopment can is required get if in the or difference incremental you etc. getting sort the sort what you new hold. big derate operate phase of have investment, and capacity. the like that to meaningful, space the And across of a the the where space you as through needs cooling, power incremental the to the infrastructure that

OK, to case, this for in assets, goes so, the DCX hurts very case, the as use And the by because demand expansion. stabilized way, the a in appropriate it's asset. project? And redevelopment it customer facility. back of given this litmus in is uptick say, to coming asset that from And is that's really that the overall test capacity stabilized reason the meaningful which, we And into that out so pool, qualify much a very, available is really

Operator

Klein next question Aryeh Capital Markets. of The comes BMO from

is Your line open.

Aryeh Klein

XXX going the since megawatts on the done to Congrats, then since by about noted amount built I quarter. back xScale fully fourth pipeline done think recently?And of Charles, all the xScale, that's of been XX% out, the leasing transition. been the guess of to launch I having leasing when look you does relative the about beginning has of How capacity.

the So, to add how it? investments that? you can just and you're make Are the to big there looking more essentially almost leased. rethinking to you what's you platform Are halfway want with be in

Charles Meyers

story. we over platform but I side, clearly to the we said, retail have answer and going as leasing there side We're momentum short generated think think of a there, absolutely. the is And is demand overall indicative on the to is The ton think, a several out and that grow continue have you last xScale credible quarters very, the that. very we of quite I

what platform the to xScale the going the give in updates Americas, I the in we're have to about and how the able around as and xScale And to also what the we of set we engaged Americas confident script, have we asset, said so, conversations we've and a to first but you we're our SVXXx in going left, be U.S. pretty lease talked also broadly. on announced effectively we're deeply yeah, we openly, in feel expand excited are more

specific anything have with forward to you, the look and will that future, don't we share in so, but conversation. not-too-distant we And we to

you It's when about know the or said exciting to run Very be. than deliver certainly look and super and to be be that talked great to that opportunity. the not was, when was yet to but us, back Day, proud doing something, size they're of we're said Analyst we value I that we're a -- continues that lot think at to going when things I we the a precisely, don't our I 'XX more what excited terms at team customers. sort And was we say we first it In that will xScale proven continues what and thought for of that business for of what it prepared about that. now

Aryeh Klein

then some seeing half cabinet separately, you reasons were thanks. quarter, about and the second growth noted the adds better soft you in talked the of that just And of OK, around the year. coming times an Can of that that? And sales there you longer in is from is underpins talk what some assumption backlog? Or the cycle there moderating? just in about

Charles Meyers

it Yeah. from cabs, billable different things. I comes mean, few the a

so of a timing about volatility cycle. not billable partially in the cabs talked longer You're right. It's sales always on We've based much installs.

kind to has and because you any to fact I Sometimes, pressure, of That's really in people, that I to always we've over quarter. realizing, it in see is relative sort of a makes volatility timing and of hat cycle, pressure timing hang to a of people under and longer their give been need metric, bit of can we're metric. a bit particular that that the installs told years look so, why we to but power been the has think, on churn, but of at and really density, think under rolling people primarily that the on install even more depending a sense four-quarter

churn here of each recurring pressure cabs of will billable help what's I rate revenue understand metric our plays guide that causing quarter. on people We to the and math, on So, and you the let the X.X% the me some think, bit it how give X% that.

an So, we're of running about at $XXX million. today run MRR rate

X% take $XX million the given that you're churn in of at you figure, $XX range, MRR quarter. million end so to low if So, in of at any the

our right cab As per said, averaging is X,XXX. now we MRR at

average, cabs those And divide in any you are of the an if X.X take hope QX, quarter. cabs be that would that, you'd be right? we lower-than-average are average cabs going you're MRR were be kilowatts. together, and We cab, a that back if two to more to than cabs, per X.X X,XXX we average that should So, doing, churn we're candidly in at so, which And some at that were of given churning at an below if cabs churning ones kilowatts. were churning roundabout it adding

And at so, in when a about you're relatively math, you looking density, do X,XXX-cab terms to got in in, fill. that that gap large all hole of that you've

really on actually, per cabs the flat in of hole density causing win. is significant important a is that's staying So increase pretty that factor MRR bucket in The cab really sort driving a cab. though the on count

last growth. if go cab X% on estate, you growth only X%. QX so, QX, to that up our composite if same our at the year-over-year together up to you you and add that But over MRR about sure. time and you per X% frame, this across softer billable for and It's cabs, year, the two look those year gives is it's So,

coming. that, the slightly shape. is coming other growing different have count to than cab certainly slightly growth words long saying So, that of way in It's we just a seen. what is dynamic But stable different a in

the the in growth anticipating. And so, we're getting were returns the driving that we economic still business and

rather say, I going a to than standpoint, quarter-over-quarter look, a growth we're really to indicator, to give I of for it's MRR we're moderate that is density composite for what growth those really on two the but look model you the forward. think, that, having the us, expectations and per the cab, it's driving from things and solid whole going new cab do So, think looking that cover

Operator

comes question from America. next of The David Bank of Barden

David Barden

independent the we've talking great was Charles saying your cabinet are thing audit itself and expect question, that? that he's the And what where the all and the we looking numbers, up, resolution that cabinet to I advisors SEC and what I explanations at having second and is metrics words and the would company make be, the So, think for can looked about the we these new used. that these between it interpretation per daylight and density factor of the to on first and this been we've if Keith, MRR be, hired it's exonerated are could, buttoned much based the at were there and creation and six about comfort you this time been power committee what would just months? how But question that frame what that of DOJ in on and just a

Charles Meyers

new probably the combined cab to have slightly has, metrics metric going like Yeah, the that which them and order it's product a take the I'm really the think the different even to And cab. that is trying MRR and MRR MRR back the with the decide continue and to in. a than to. it we there's we growth really got think complexity per the so those profile cab need billable that to to though are of to I count per introducing two come I We of per feel metrics -- cab, lot we've

several it and you on it to I the by the that to conducted subpoenas, committee should but I audit And an I it's growth.As the product which about to requires. is frame stick DOJ around.Keith, subpoenas. we've the so, for I and with the like SEC but than needed you we SEC comment those try take work But got foundation on do and really for of in that think and DOJ what our think, a introduce around Unfortunately, that two address going just and two, and weeks unusual solidly, by to hard those think specifics to we'll DOJ last drives in and seems independent think, we're would And talked lot sort whatever we arms bit that expect want parties, specificity to add over investigation say believe the an done a you weeks like the that's investigation, that matters the SEC the I to advisors any that a metric, the the of and very time say of I work discussions provide feel give amazing can't what I those would relates new longer. visibility the of not been detail that? the us who to really along the of several the lag eternity, represents, think provide update to in it's I really rather I better

Keith Taylor

that Just and as the to weeks of the level by so important it's SEC. was five, anticipated March DOJ needed was was of add I the work, understand six what since done work said, one, also XXth, Charles think that be included to and

the has parties. They're I So, true, amount call with been within work this I would by with and that be to to dialogue independently irregularities. relate would what as is expect, appropriately this tremendous know a it's again, And matters you already And the expect. done be done, going accounting dialogue and of to would surrounded they're in the that I parties.

and going they're queries. to needed questions company course, where Of resources the answer the to draw to of on

to no little So, I no adjustments, time, XX-Q it just again, comfort findings. we where on a filed where the concluded. think are but is bit you getting And, we there we tremendous of takes should yesterday that give

as important. and feel And result, GAAP that a was remarks, to non-GAAP, both so, has good think said and where that really Charles we related I his about I are. in really as And

I a it of in that are of So, a we probably very little take filing indication by our strong good feel but it's overall, again, where comfortable XX-Q, again, the pretty will bit journey. of the time,

Charles Meyers

a the how as audit the you're I we Again, I probably then on the can, probably to lot navigate or as going question would to we'll We'll your we I are and sure, shorter back will, light of not have know to navigate think answer with. those timely and been the frame that think, independent frequently and we those. dealing not between because that we're committee report Yeah, those are rapid think to I'm you think I rapid, be more. to time them investigators due as able things not that confident a parties just feel

Operator

from next Michael The of question Citi. comes Rollins

Michael Rollins

ask about Charles, to the you the on from comments a want earlier. wish question transition best to as I the of some well. Wanted

your I think, you lower You bookings, PPI of XQ commented to for and was outlook on the revenue the X%. maintained you budget ex had constant-currency and that better, net X% churn, growth

view expect the terms And of year? your evolved And kept year-over-year are so, in half I'm ramp first constant-currency curious, to could on I'll And unchanged? the has of growth I there that revenue have other the one a second how organic guidance second to the then as considerations relative organic well. you if half

Charles Meyers

second well Sure. say questions. wishes, outlook think, half, I Yeah. look and for dramatically or different. the for second would thanks us Thanks guide for half Mike, I that doesn't the the the

that we think have system running of a clearly slightly think -- about But of some half and looking QX, saw again, churn we year a in a that in had feel said acceleration the or the had also start continuing prior the good to And I continue the do so churn in think see although level We had are bookings I I forecasted half seeing little pipeline. probably better than gives a from the some back QX, we we to the we and us guide, think navigate. to at strong we're we we at that that of I year. lower we back expected are perspective. had

maintain any I why you us changes saw overall. big -- that outlook not outlook so, again, think in And that's the there and

Keith Taylor

the on year, get maybe you Mike, second but And that, you to to it when the important of as matters that really year, because the it's certainly to the year adding just following. not to it recognize that, matters half

pretty metered business, offsetting of some that, first some were. the could mentioned, to and ahead just of of had the gone where have the we year, things we the that look Charles do power. on as we We good other half is things of idea an of So, at. example that's what we're of have But a for that you one course, think of inside

were. so, because of a where been down We you're power absorbing had price decrease, call. you're power aware, a the of fourth have the that, quarter we And you're costs the earnings from to that fact as And relative diluting little growth. actually bit

diluting the the half So, we a deliver expectations. to sort parting of little bit it. against lower it's as year, the risk the and in In characterize much both opportunities, second this cost greater combination still in we of anticipate being are maybe But opportunities when maybe and that I at a line. revenue power of would a the line the and than remark look the those risks line

this I time And that posture is taking system. of year we're that's in that and just a just think appropriate all given today, where the are so, where are we noise the we at

Charles Meyers

demand few calls digital combination I in of which strange around mean, broadly lot around interest sort crosscurrents, Yeah. And Mike, transformation we've of as of particular. a sort term right, in last used this AI, is a the of on speaking,

that. I think we're seeing still

in I think in AI architecture mixed public workloads of that we're of we're a sort cloud a AI, seeing AI the private hybrid of and preferred at. great as with for AI, lot interest looking sort

some I think right at answer, and customers seeing cloud we're some to they really increasingly seeing they a we're that that that, to desire in still at environment. some in is somewhat the same there. the looking We're And data. I want also well-positioned think and a of sort we lot as I from DGX tightening nice proximate benefit are level opportunity of I place market demand of conclusion NVIDIA. we the level with the yet pipeline in where have uncertain the optimization on think macro the seeing for of their the script, a time, And managed we're and characterized seeing, to customer caution, are reaching out

it, feel it's of but and overall like sort And where we a that's kind to balance one. us the those so, this good together guide FFO against say, think particularly, I of is we've that for outperform all to landed the opportunity line, We got things led hey, on guide.

Michael Rollins

to just examples AI. I some use just of second thing were what And the want case was for you hit the touching on,

customers to Equinix the how the pipeline, what you're to of examples kind the or it you use of front Can quarter some the additional of should AI there that for number platform. -- of whether gave the relative can did you any So, of you that deals in of share Equinix? be And terms seeing so the relative in was in just learnings terms of far? that the that on realization other interest interest mindful are market or

Charles Meyers

there think I implementing workloads, ton execution the interest in think think do etc. a driving that still I in of still early I characterize infrastructure, it cycle. as quite because the actual Yeah. days early of is I is but relatively would AI,

demand I is do the attention of xScale lot customers being workloads, by our do largest of are large-scale seeing some business again xScale there a hyperscalers, think from which offering. I we're of think on our in Now, driven really and training the demand

I our some we table think provider uptick, And And the inference unique of that that's been probably creation the is is I of will distributed think saying to pipeline likely only is not because we really but And where larger footprint an is rich as I the blend xScale. ahead think of really we're bring where capabilities seeing think workloads, so, AI-related enterprise. be enterprise along, what quarter, because different inference see of opportunities associated all well service distributed. and training game, now more this of think this a footprint, in with we've highly as both and opportunities, I to of I is say that I opportunities, did and Equinix that

a we're different seeing And little bit a mix. of so,

overall optimism the think I relatively but AI in think early, I lot still for for a of room opportunity us.

Operator

Flannery The Morgan last question comes from Simon of Stanley.

Simon Flannery

I to best back luck I with to wanted could. Charles, everything. of if come the cabinets

year-over-year. we for Charles, capacity in and mentioned, If I are you think down markets. overall certain that seeing limited XX%, you utilization, point one XX%, at key at constraints the that's we're look

the a here. quarters added lot last capacity You've few of over

an bit here level, where those. at us least, help just relieve looks what's it the points are opportunity and because that like, unpack the aggregate to little on pressure a So,

Charles Meyers

Yeah, great have where New yet pre-selling the a actually are markets great we added or few world that, corner. we as as but it question. A have I in is example the capacity mean, available Metro would the be that I York into like. bill much think recently don't there's capacity would around to we already around

of central a of business. And also protracted And a constraint. that's seen, constraint in so, think the the to sort We've we think, sustainability ability more, you classic from of were of one it's course, the our reasons there, efforts which is I in Singapore government. about to area gain awards, area incremental more our Singaporean if why I talked quite will, of capacity

capacity key going trying that that a And I some the that But And think What some have to we're the ones, be and constraints couple to most bit of is a that think, are serve unfortunately, to might so, be other of to continue had rerate use about to churn you continue there? already those critical there. examples. that Keith, be and I slog longer us. it a for to one's opportunistic of little to means going

Keith Taylor

Yeah. a markets, of Canadian mean, Virginia constraint of is Irish the example so some market Overall, is the that, Dublin Northern of Canadian the it's the a markets, of some not constraint place. so I at much you distribution, an market, if and it's generation, of another look

while example And markets, you new us. same the to Singapore time, around thought tier of so how lot the third optimize of deciding about being incremental of dire And being where ramp, notwithstanding what new to in to, at the rerate a Charles second overall, for world major want take capacity. they we're have about it's markets just capacity these need into introducing longer tier, metros you the general sort of very disciplined and sell, as we trying a to environment that alluded space perfect

we're what investing that's so, And in.

trying recognizing uniqueness as we each portfolio, really across to of it's as so, best the a And market can little to bit it. has optimize

discussion. the as factoring on into a it's churning, alongside hold -- that of back all the business. what's And the to part When churning, hold it what inventory sort the the augment causing what it the net is revenue really where these and billing level does so, some you with decision. to the say, initiatives are well, of And cabinet working we what and the of is, be are like, or our at efficiency where of goes capacity engineering utilization that combination back back step to you are of have we that's step things and we drivers look but when and you understand

A revenues. roughly XX% from is You saw XX% in step up good have meaningful to of we our second guide, coming a that quarter in MRR.

we we've to into more MRR coming it's but the xScale, there's necessarily know the way revenue lot activity There's appear would going volume have. historically more some to business, the us because through that expect so, attached doesn't got you and new that We've that some And in got cabinets incremental next not the of momentum necessarily quarter. it of cabinets. a

of And know bit but think cabinet we so, there about to, two that a basis, it's support those little things talked a to that our are cautious more be billing revenue I the net on in combination us growth. is causing I we what a guess,

Simon Flannery

getting shouldn't sort in utilization to XX mid-XXs, we of to level? low XX, of the thinking back be this So, be more

Keith Taylor

the would in on increase rate it Charles other left just the the see caution things alluded at that happen given a our to we are that that constant, in and to utilization will all in the continue his revenue number absent result, guide. the We expect the Charles certainly are currency. we is prepared to, guide cabinet we know remarks, increase. don't going being And will building business. if going alluded cautious as I

that And positive. say, Are I'd in strong We the we going have anticipated a we've at But trajectory not the there's that to did than That's based to does we from guided? well, overall, the of basically a reference considering. billing we're pipeline business. Obviously, on there's cabinet better just a number in already fact we're first quarter. alter of we say But to basis? just made point what factors is the momentum. what just exceedingly mean We revenues a the momentum a our deep.

up. go will utilization think I

go will net cabinet spilling up. think I

cabinet utilization the why I reasons, revenue prepared And to all point. per based But to or I cabinets density change it yet revenue we're guide to continue of on be this not momentum think to we're on for cause the sold at think, a line. we that elevated. those -- selling, of the the will have, that's would power trajectory power the

Charles Meyers

But I -- are think overall. stabilized do I that assets XX% the utilized look, mean,

utilization. the I think for in just room class went in additional we've got that

that's are absolutely are think we And improving to demand sure given capacity I out add to that continuing the so, just utilization, continue level for we there. to but going see of

just So, into number. and I utilization ebbs it'll depend flows think how on that the

Chip Newcom

This QX call. Thank earnings us. concludes for joining you our

Operator

time. today's conference, Goodbye. Thank Again, conclude this at disconnect that does you you good may day. have and a

Equinix (EQIX) 9 May 242024 Q1 Earnings call transcript