EQIX - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to the Equinix Fourth Quarter Earnings Conference Call. [Operator Instructions]

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.

begin. may You

Chip Newcom

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

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

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

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

current about like made also designed regularly to We've website data. check remind most financial on our supplemental for you information. time, to the that discussion, IR Equinix of along and available certain the time would a to website page you to post our on available IR presentation with this page other information encourage important accompany information the We from we and

Fox-Martin, Officer. Keith Adaire are CEO Equinix's today and Financial and Taylor, Chief us President; With

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

the to call time, Adaire. At over turn this I'll

Adaire Fox-Martin

XXXX. full fourth for Good to Thank our welcome call and you, afternoon, Chip. quarter earnings year and the warm a

Before a in figures, that I wanted successful deliver to key take a we year we equally dive which our to to underscore ability to in was and measure. moment proved into the XXXX adapt

only the ability the in our and moments of consistency the also, meet our to increasingly market. Our strength, resilience demonstrates future importantly, business, performance not and but

to unique model connectivity This the spectrum opportunity the to full business Our as me enables we and most us very our our make continue serve shape great infrastructure customers' to of confidence gives requirements. the digital organization ahead. of

we our our long-term of as growth and a for lighthouse constant to normalized grew were an share, year-over-year, consecutive was results. growth. to close turning an currency full to billion, This customers. These performance up basis top point end year-over-year. margins expectations XXXX. metric, to is the XX outstanding AFFO value had are excluding per X% our rates costs amazing our years year shareholders. improvement passed XXX billion, our a compound Adjusted our lower the power Now $X.X XX% through at We of $X.X in EBITDA year-over-year. continue Revenues on for revenue basis, all quarterly

QX. Our outlook and dollar as-reported U.S. stronger tempered significantly been during numbers have a by

and Our an health quarter exceptional team their opportunity. has executing variables the strong outlook, against highlighting our focused the within control to and of on all business our deliver scale underlying of the

XXXX, than to and deals accelerating XXXX. regions. performing dynamics pricing our more history, with in a we This in bookings gross XX-year the of customers execution of across our pace and sense more give To than X,XXX XX,XXX execution, across translated best all in delivered both strong QX X solid

we location, non-Tier including right for our workload year right record the the in sold demand proactive XXXX, in in ever best volumes by customer sold, Supported in delivered the right shaping, megawatts putting X with metros.

bookings of range and cases. XX% the program company channel industry use a year, of across XX% more wide and logos nearly of with segments than Our for wins new delivered

XXXX, during XXX capacity of business, approximately xScale our capital we program. megawatts tripled leased In the of the and investment nearly

greater our operational PUE by our team five $XX customers. Xs delivered This Our lowering decreased supports for costs best-in-class infrastructure our also for uptime enhances of digital and They X%, operating green to million XXXX. than more operations efforts customers' by both than our their efficiency.

XXXX, I change look of faster. has as opportunity that to Now is that pace time, that technological At market relevance the to opportunity the has never been greater. and strongly clear we been the believe it Equinix's same never

workloads networking our and host diverse support infrastructure intelligence of architectures, artificial capital and to and workloads driving peering multi-cloud hybrid we as cases their a centers range broad use creation, within digital through training. market to We to data are from the customer fortunate needs, value

the of remain We democratization our for confident business. represents that investment driver in AI demand a continued and secular

In Equinix and happens. to XX AI continue more place of We as as to workloads. volume our opportunities cement of both AI half cultivate private and inferencing workloads top where significant related was compute the high-performance we for and than QX, the deals training win

increasingly healthcare, learning finance, of cases gaming. and we a use diversification are transportation across Importantly, seeing AI machine and

deployed throughput yards. Recent Equinix AI-based logistics the that safety training workloads wins and inference cases use freight Technologies, enhanced include maximize in in who customer leader to in production yard are and autonomous at operations, Outrider support

seize journey customers are the we simplify digital on for consume a to to the path market opportunity, infrastructure. our To

two, in smarter; priorities moves: on one, serve solve accretive enable we focus expect already Our critical These them our and bolder. are bearing strategic growth X fruit, XXXX and we three, can; how beyond. build and to is better;

refine precision customers sophisticated simultaneously customer our velocity. that a quoting cost value capacity part our customers bookings visualization the with our also First, creation customer-facing and our continually to execute enabling accelerate serve It better nurture we our opportunities are we into compensation bookings whilst of tools, These are and as We by for changes and experience. rolled faster. to our to and journey segmentation. revised automated to approach out introduced resources from to serving plans revenue we more means improving

for Second, customers. are our we solving smarter

and easy product inherent working make and to complexity manages button our portfolio We are hybrid environments. of multi-cloud the Equinix AI that the simplifying

We focus continue connectivity. of extend we can of our are efforts differentiate resulted prioritizing to enduring our core development also This solutions value to interconnection. value Metal, the particularly proposition and to Equinix, in so products that will Equinix around our end-of-sale decision concentrate on

delivery across seeing bolder. are balanced the optimally and in generative needs in a to of our should full at retail the respond to continue particularly product dynamics, salable center we retail, combination related density pace. footprint larger to we fewer, this global accommodate capacity building continuum to marketplace, our scale. larger rapid customers' approach unique us at Finally, campuses a demand No xScale. whilst continuum on bigger the evolve offers data provider of to Based to build with a those signals product plan AI, market we interconnection in This phases, data allowing are on accelerate other centers market allowing us the traditional as our

visibility intent More metros, gross available rates. here, this stronger if X and an of By Whilst into bookings Tier even is our clear in than XX% pipeline QX, fill we had capacity delivered retail towards have could in bolder, we demand. have in and metros. is our bookings our we building outcome major expansion we delivered sprint supporting to record capacity

to for the Now the pivoting highlights operational quarter.

build network metros be XX Our the approximately continue premium of XX projects our now X/X our of service global to countries, IBXs, XX,XXX of customers more end deployed to across generated through in to footprint. now value XXX revenues This have globe. of of and XX customers invest will our our which XXXX. xScale megawatts we in major With capacity, by XX projects. including recurring centers the data than xScale delivered retail XX across underway and cabinets We represents

will our announce of to XX XX in new data reach This digital X megawatts pleased of Singapore opened one metros Indonesian provide our we facility across presence were center month, we Jakarta. first to November, economies. countries. fastest-growing XX build. in APAC's This expands capacity our This In

growth X,XXX continue X% interconnections have QX. constant and of representing than currency platform. normalized Interconnection value. now to on basis, industry-leading year-over-year digital up We stepped customer revenue Our interconnected total XXX,XXX and XX% underlying on ecosystems our a in We incremental drive an interconnections deployed our more revenues. now added recurring

customers is partners to their XX XX adopt to AI. second increasingly of and lower their gigabit ecosystem and cloud networking Fabric in on-demand, the to Zayo, company, growing and aggressively is cases Equinix Interconnection delivering independent bandwidth expanding markets over-index WebPays, router and wins enterprise North included Equinix, its in exponential America, fiber payments with cloud meet as high-capacity use demands connect leveraging Fabric the key by to circuits. infrastructure per continues customer driven largest and processing growth fiber connectivity who key provider costs.

customers service demand incremental megawatts xScale Our support XX our xScale leased assets. our announced opportunities megawatts delivery XXXX projects completed in additional and a increasingly are XXX and than capacity call, portfolio as we across their cloud leased an XX% providers xScale is earnings Cumulative and of as pre-leased, for to Since leasing overall dates and have over Paris AI globally. now to Whilst in our last XXXX businesses. funnel and XX Paris expand strong continues more see look secure XX beyond. we strong to

access host this stored management for quarter more is York Native and in multi-cloud enables hybrid requirement for of and twice in especially control to the and key security, and the a multiple new cloud cloud metros the City. connectivity workloads. cost, X on-ramps and/or cases We data access native than our secured use inferencing customers on-ramps Mexico a We native with to neutrality, New nearest cloud training competitor. strategy. as of a cloud improved Ease pursuing

to shareholders strength I'm excited our is our the team our by growth to of value customers differentiated model. the our business the business the ahead. of for of deliver our ability and for a performance our and in for in quality proud accretive testament and year opportunity Our XXXX

I'll Keith to the to quarter's cover financials. With turn over that, it

Keith Taylor

Thanks, Adaire, and good afternoon to everyone.

year. had end deliver the to noted by across all continued already we As of organization. team Adaire, levels great to Equinix The the a

pipeline and the conversion our each while net the go-to-market highlight the engine. had our our gross net and healthy record bookings across bookings full year. unrivaled actions year, For strength pricing robust throughout our improved of diversity of performance solid and We regions

operating quarterly via We our billion cash trust, Over a lighthouse as-reported more dividends. also period, also celebrated capital XXth returned grown this real we has compounded than $X.X share per to XX% AFFO for our shareholders an while the milestone annual our year metric a company. investment basis, estate of as XX-year our meaningful on

continue to has in Our execution many accretive past us the a This model years by and decade. consistent customer and business the a create exciting to for to highlighted time. we drive truly significant see focus strong business come. the as and very to positioning over allowed value Yes. are is very Adaire, And ahead opportunity differentiated growth

And trend completed our nonfinancial metrics continue favorably the year. we to as

stepped Our strong billing quarter, net driven by up X,XXX booking cabinets in continued by activity. the

over yet of year, sold combined goals, not operating Our with continued cabinets but drive installed this backlog core when of metric. XXXX doubled performance our the plan last should which,

a also step-up Net its cross-connect activity level years. showed the healthy underlying highest gross at was in interconnection X as additions

MRR positive per $X,XXX to driven and stepped densities. cabinet increasing up actions by power our pricing per Finally, yield cabinet net

drive value we meaningful the the business. while and put, leverage topline the across both to delivering at continue simply operating level, per-share So on

both prestigious good pleased to needs fundamental tenet year, We Climate both of third the to be we're a be rated recognized drives MSCI efforts and front, sustainability the sustainability Change of operational AAA for CDP's by A supports also the our consecutive consider List on time. first business. our the while the very which for customers our business, for On efficiency,

priority to And product organization into greater to better the enable of areas. and of This continue offering, services investments beyond, products other look with our in us forward realigning our and and adapt each finally, to XXXX serve our includes metal while organizations efficiency. plan make as key we customers we our to end-of-sale to the

we to Separately, recorded totaling metal. a the for specific impairment impairment Given one-off X related our a asset booked on charge million. of assets $XX the $XXX Hong metal decision, charge million and we Kong discrete

decisions, invest in also primarily the business. to on reducing drag They improving a reprioritize decisions right us our difficult restructuring force also million $XX for are capital. although quarter. the the business our in We the recorded the at and return These we charge, to where allow on time, reduction invested the related net while

section X. customers. basis Note the rates the power in and of cost on Slide me are constant through Now let quarter passed currency this that the cover on to a as our all highlights lower and impact exclude growth depicted for normalized

billion, up both and at fees regions, and revenues the QX revenue quarter portion of guidance same our our our were range, million FX with our the being of revenues, across given over hedges, the guidance prior Global quarter. year headwind to $X.XXX fourth last our dollar when strengthening X% a growth of FX the in compared despite of QX net into recurring a QX. midpoint nonrecurring solid xScale deferred $XX meaningful included the rates U.S.

adjusted strong QX compared hedges, over when the included of due range to spend year performance, prior XX% guidance xScale $X fee the approximately last or quarter to adjusted guidance revenues, was net X% mix. FX EBITDA our FX rates. Global of our million and EBITDA, QX $X.XXX and billion same sequentially midpoint headwind to our a at down timing though due up planned of operating of

QX Global AFFO compared strong to quarter up seasonally by over was a year, $X prior benefit XX% higher included FX as due $XXX last rates. our performance our million spend operating AFFO million, offset same expected. guidance recurring QX when the CapEx to

late planned, QX for been to MRR Normalized timing, of was X.X%. previously have from the deferral would October. churn discussed due X.X%, MRR into Global as this early churn churn September

average our quarterly was X% half placed range. our year, in guidance X.X% of quarterly full the the X.X%, to For well churn lower

impact through of on our passed year-over-year X. at power fastest-growing results customers, highlights, APAC at basis, lower region to the through to the slides full by our region normalized costs regional excluding are Turning was XX%, our a followed On whose X covered X%. Americas

in growth the leasing and at region noted XXXX. levels. Again, X% regional of activity xScale consolidated xScale both are fees EMEA and quarter-over-quarter grew the year-over-year Our lumpy as by impact year-over-year, can significant dampened the inherently rates QX and earlier,

its quarterly strong region the strong Also, region had reached Americas the quarter export very well team for Santiago X The in assets, momentum X billion had best years. quarter for solid Denver, the our time. across strength gross our achieving markets, bookings first $X Americas with a particular as Tier and our as saw in as revenues global threshold in metros. continued Montreal revenue sales We our

Our countries. Istanbul strong record purchase signed Milan. bookings our In EMEA momentum flat firm led metros new with the with in greater and Equinix's solar under business also in Neoen to across than X.X total agreement pricing, Geneva, we support megawatts energy power projects. This delivered global brings of agreement gross by Italy XX capacity and our quarter, first XX renewable to long-term contracts gigawatts

the saw and great a our gross Osaka significant from as we both domestic strength finally, had both AI We deployments bookings. quarter Asia-Pacific markets with to in continue Tokyo region particular international And customers. record capture and

We Sydney saw also Mumbai, in and strength Singapore our markets.

to looking Slide please now refer structure, capital the X. And at

Our peers. terms remain relative our X.Xx in net and leverage continues absolute low, to to both

and financing cash meet balance which on record needs a up capital sets to our solid activity, position customer our XXXX. our sheet, due for us investments collections had funding of we year-end, in of and XXXX short-term us to billion puts As $X.X and

In the issued notes of in billion a quarter, X.XX senior average weighted at X.X%. EUR we green rate

capital take Additionally, opportunistic a our $XXX we when conditions program. to fund market We of future continue of billion notes approximately balanced through the million equity the plan $X markets are to quarter accessing and and approach favorable, in repaid our the growth. to ATM senior to raised and as

X. Slide to Turning

de CapEx billion, expenditures including Janeiro. the and capital were major higher projects approximately We Barcelona, million X earnings since Jakarta For planned. recurring $XXX opened Rio call: of the last as seasonally $X quarter,

land XX% purchased More spend development than and of ground current leases. We land, in is on also our our Lagos own expansion long-term with Paris. our retail buildings, for own

shown as Our capital investments XX. delivered returns, Slide strong on

stabilized XX% and Our generated XX% increased constant X% utilized basis. an now collectively as-reported a on assets gross revenues invested. on both XXX Stabilized the were year-over-year return PP&E and assets currency cash-on-cash by

we asset summary earnings unlike our reminder, update years, to the prior a plan QX stabilized As on call.

summary guidance please basis. to all constant bridges. XX XXXX through growth on and slides Do finally, a and currency our refer are rates for normalized of XX And note,

revenues. with Starting

to For topline X% growth the of full year expect X%. we XXXX,

over X As significant backlog lower impact normalized noted, basis, cost constant our on capacity revenues continued major in the but passed our through and which for in but churn of across within course $XX timing of this is range bookings to a targeted and additions years X% power step-ups and momentum sale largest of metros, a of X.X% guidance adjusts currency remain step-up revenues, the offering. and metal recurring FX, our of customers of also year. net the QX end healthy MRR to quarter. given of our expected our the our recurring And per to our quarterly million is assumes product

basis step to of to adjusted be targeted second our adjusted And at a margins in margins year lower near We increase meaningful and seasonality. like approximately QX anticipated are XXXX margins the course over to leverage, in EBITDA power EBITDA expense operating expected part efforts XX%. revenues, a up expect prices. XX%, point quarterly or management over last due be margins to the due half to over strong with year, QX, expect improvement XXX we And

X% XXXX our warehouse AFFO share year. beyond, previous compared per into and capital refinancing maturing despite the and in debt between X% sizable 'XX the in also to the future of is grow AFFO expected to expected and between support to and And grow is investment the 'XX, XX% year. growth to X%

and of million $XXX joint our to $XXX venture, be we billion billion, $X.X spend, which is as million expected including assets about and CapEx range reimbursed xScale of sheet expect U.S. recurring XXXX transfer spend. into on-balance between $X.X CapEx we to approximately

And consecutive per performance, we're of which on growth approximately basis performance. conversion. tenth our XX% dividend share is XX% to operating billion, our dividend operating by increasing year-over-year REIT of year due The XXXX share dividend be finally, strong from per a will $X.X cash be XXX% cash a our increase, to since expected derived

So Adaire. back stop here turn to the to and call I'm going

Adaire Fox-Martin

you, Keith. Thank

team demand a services our improve for to drive the XXXX the for and in year our in Equinix our Equinix, was continued a customers, prosecuting to shareholders. our record excellence QX that closing, profitability execution demonstrated In our and performance. record enduring to demand of market the by of our offered in return service quarter

on we XXXX, down ourselves and prime will double In growth. these for qualities further

We our will world: differentiation of our cloud focus on a our elements the our our density product global that reach, in business relevance continuum, our define connectivity. interconnection evolving our rapidly and and

embrace will We and efficiency pursuit effectiveness do. all the in that we of relentless

work greatest margins much possible, attractive driving easy so make to customers our will that and at Equinix the the we capture value growth, as can revenue and We opportunity profitability. it our increasing for deliver partners and as of expanding

stop here questions. it to open and With up that, I'll

Operator

first Our Instructions] question with Simon Morgan Flannery Stanley. comes [Operator from

Simon Flannery

the love get to Adaire, and be your your on on training the comments important may seems about had for a We intelligence perspective in a inference and coming recent coming DeepSeek inference news and weeks beyond? numbers that XXXX, how through sense relative good XXXX think development you industry, implications general and to quicker. on inference. that and more and I'd there's interest in the on artificial like the to hear it the of lot

do you've project? And I update of stand we build identifying programs xScale mentioned since get to great a little just forth? be you JV. Keith, so briefly U.S. terms Where just on It'd that in markets, announced and think, the

Adaire Fox-Martin

it's All of the question, Yes, you right. much so an period been time. Thank for interesting Simon.

and that performance a compute we've in expect along something continue. to the step-change think seen efficiency I I that is curve,

the and see training expect the continued to innovation sector for We we inference, is in which think across net both positive a space.

to I open set costs source in feasible into for will work inferencing bit transformation by market drop enable little organizations. become the by more think, implied of of DeepSeek, The a released broader the the AI economics a that's

driver for why our feel this business. that's so a we represent that will circular And demand

infused characteristics the inferencing of years, out, and to relates our that actual within that XX% will with of in And apps for an AI. certainly, of that if role own processes it and As that that, will the operate business businesses example within true play too. fact, next will workload be is X how us we the and be that, is something believe

can the Equinix You absolute of see relevance to opportunity. market this

demand the workloads were requirements to XX% in I deals deals QX closed XX very And very prevalent opportunity. in center top and related right and QX, are that training this associated mentioned in of much we of were remarks, my where inferencing as the compute high-performance with We in present.

value applications landing these will across apps plays clouds. And we with and proposition it One capability think then things of profile, that means to multi-cloud. that process that all associated will in market that into land there that the order clear is agents the running. everywhere that I also And have the strongly are very the is will be that Equinix's underpinning data be data everywhere that very they addition information to and in of

architecture and technologies this easy mount will and make customers be globally our deploy and to we and of from continue We agents important abstracting make deployed customers opportunity wherever a and customers that agents So interfaces APIs how deploy our easier a as it these some to access have models, something apps extremely easy for to through have that our Equinix pivotal these customers on at interconnection easier is look for role programmatic key bounce that wonderful that in us, this complexity located. in the at to for for how connectivity density to our will deploy see to will PoPs. the for we Equinix in this and our be to that means heritage data we of that is it

We pace. the market innovations continue is very a is at to a will very come we're where that believe appropriate see. opportunity, the So about actually fast positive that continue know the garnering and that possible. And towards encapsulating of that we our and opportunity is to and as on much position as that we innovations this one very positive balanced

here. So very potential excited the about

Keith Taylor

you'd just let second the for question And asked, Simon, and me again, it. capture that thanks asking

X want which with the matrix I and rest you the going in today. and what's the going in to aspects on there's share xScale. of There's listeners site what's think I in on

In remarks, underway. we as have XX Adaire's prepared you're xScale currently projects aware,

of -- have Now or as that are things are built that, XX% part of all construction that been roughly the one that leased either been under we've announced, have of that XX% basically presold preleased. projects

the So you at it such relates fees, sense marketing. fees, nonrecurring least the momentum, gives it a and one-off as as of the sales to

that are we just you that. So aspect where in of a the sense of gives

relates -- it power ready investing power power equipment. and including utility when our xScale As the infrastructure a available linear the business, of, provider different both of the for the which it. with tripling really basically commitments, hard it call, matrix, what -- get also or on forward to the to we're infrastructure to working related lot need the working providers is in Hampton We're MEP or site, with and we as I

towards. goal is working our asset is that's an hard up XXXX. have Our to we're That and in what goal

making we're sense there. you So it gives a progress

U.S. where got other could else we continuing the go to outside we're That even all said, look discussing United of sites at the without we've somewhere that X States, in

think, So progress. really I good again, making,

it, given operating new guide just we're roughly you've want thing leave you, I'd behind a everybody Under you seen. heavy million leadership resources The to roughly that's with the the that incremental as that in in And there's making and our putting we xScale with $XX to business. shared with investment. triple expense that the and of probably associated $XX said, million last really it, Tiffany with going the amplification guide of I embedded is, we're

we more we in us, 'XX. So this XXXX, tells we as next 'XX, you to 'XX of exit it as both and how but front look opportunity about into committed are that's

Operator

Our next from question Luebchow with Wells comes Eric Fargo.

Eric Luebchow

that funnel your back on bookings a that just And what in looks larger the forward retail I talk wholesale about pipeline you depending your may the in Adaire, have could segment to today. and of the more returns to prepared interconnection the kind look talk about definition. on or remarks little a wanted of your colocation momentum. spectrum pricing about talked your Maybe end small maybe like and how could and demand dense you business? touch Maybe retail what bookings the trended bit core mentioned relative pursuing . you you based like

Adaire Fox-Martin

for Eric, Thank question. much very the thank you you.

that CEO. the So QX of company first of of being CRO I both all, let me the had say continuing in pleasure and into the the QX and

gross as So to the executed bookings the team quarter. be I with record mentioned, very QX on delivered, had the opportunity close they our quarter and as in already we

largely QX that large course, that in providers this ensure my happens and where their businesses the grow the was we during their think, service our that looking perspective. capability own And to sold in to works for very that customers are This elements number services. footprint program engagement. due with on one. course of this who a needs the of to demand-shaped And closely from I was the is, of I own X a order to made non-Tier footprint contiguous see, footprint the early tech be highest team of is had volume capability in that the we metros In of other remarks different the one and no in -- terms of year, that

demand a of In circumstances terms of and demand, pricing, broad-based we Equinix. are absolutely seeing a services of of course, where and set being there by positive in the terms products is in progress in pricing offered much for

to continue pricing selling into. we that even we X So across are some Tier the scenarios see strength

Eric Luebchow

X% end on for are providers update where one think on some year. you've settles of on this from just Any Maybe gone you forecasted basis? had back the lower Great. know in And the the I expectations that throughout up the a current us activity follow-up could and last just update sustainable what range you to you through of for grooming your year. service kind me. picking QX

Adaire Fox-Martin

Yes.

I churn Keith that this due mentioned was So In end into had X.X XXXX. churn that, QX, the think of normalizing average our percentage October. a as September from his our was for put churn fact, our saw for we early QX is in have remarks, to X.X%. QX, the late And deferral you churn in of as top range. number would rate a And churn which the at across for

be MRR that expect to our range, will that's X% what XXXX, churn and So absolutely we to. to in within we manage X.X%

MRR reality. a a our any as as products churn of reminder, in business, line any we this consumed churn an definition includes topic, order discussed through at And services or For just level. is reduction

So count even another might growing though in another on region. the be customer a either even with net and us basis decrease that in location -- we or

And there a I factors. think of are number

CRO into hat this So has one the here here. to and of unpack to team work been aspect double-click to data my opportunity the the with

we churn you the all, see of customers. that have, side, associated of churning looked on are that factors the can some First at with

our Equinix continually what the think frictional of that, are to By even and churn, that they're them. the mean Now as structure some is center. seeing mean center. And that platform doing customers I churn. to we're when an order I leaving the they data continually of It they're and It frictional. mentioned inside in doesn't maximize cost-benefit that strength to I they're as much the evolving their of speaks already, us means outcomes grow their this architecture with evolving health for continue data

and interconnection than when one a have perspective, to us. have perspective from a more metros or who both much Secondly, multiple regional an data, multiple we customers know with the are looked interconnection lower at us churn as regions the a with we've in scenario customers do or that propensity who

that's the ensure on that we the with one course doing during to can sales that managing be of interconnection intend whilst to the lean So much and our of the we we we're year our process customer. X.X% to in we we X% delineators of later rate expect XXXX, because clear course as rate the are around and front the churn the churn ensure know relationship of during that in as increasing between to meaningfully end this

seen. of look us the we're to series data we a we of end manage guide XXXX. that approach customers. within guiding whole this how have to range to the help that and But with topic looking are of it So and the data our to that for X% based lower the range And X.X% manage we'll at things we using on to

Operator

Jonathan Our comes RBC Atkin next question with Capital Markets. from

Jonathan Atkin

and management power of on guess, I on other One, the headcount. questions. kind Two

even and you're that first SLAs and the agreements, up challenge older your then the I'm those meet meeting headcount to service drawing does And On on of their power in framework potentially stabilized IBXs, how how later the within your business the buildings? question. new existing take customers topic, on I'll ability wondering of more affect follow within

Adaire Fox-Martin

all cover to ask Yes. of that I'll ensure and topics the through work add anything the one I to power here. Keith I'll

context that would into our a we data an our say to series within we history of I SLAs. ensure has business, power to in as environment. have order SLAs that input XX-year valuable the very managing a and we And customers our input center are Equinix thing a is One manage whole of those to compliant with that, carefully of

And aware our the would assets. not are assets, context around am any relates stabilized impact our in how that issues as I stabilized power customers of draw executing of a to it those

that would that to anything add there is piece? Keith, you

Keith Taylor

X Jon, inventory in Adaire's that, a it looking is a in there's also that energy walls. meaningfully, based energy that there Yes, the as of form it more of very to on the to remarks you, on says, manage Adaire prepared to conversation. form in of we of the of a customer increase the place that Part cabinet right And the and that's more the the extent we because, to is needs no demand-shape demand-shape detailed you to where got inside the allows and the team processes customer. just set maybe have follow power, surprise was in

it's PUE. to plan the efficiency That you is or probably VPs of else, initiative for power all key or and anybody a also the the modifiers said, above not to surprise compensation one

and through gets consumed we're operational different always like. to that amount software so packages And new or down drive energy the of working exercises the different technology,

ability older customer created we an extent capacity gets the that, the sell then through the that asset. to And maybe it so to have inside

would into core location the customer it to And the no right on to needs inventory that basis. But vectors. application that we IBX of suffice that and our manage our the inventory that's the said, availability the cooling and that our say, you're again, look, Again, managing right it's appropriately in whether tenets right and I energy for right we just as Adaire and from put is the required that, number say with inventory. of adjust is asset, one different a surprise consumed, going again, the of

Adaire Fox-Martin

a Thank second And you, question there on Keith. was people?

Jonathan Atkin

switch to expenses. going I'm Yes. to topics

that just XXXX, or your associated to recur costs anything maybe any or that on XXXX 'XX your whether IT not it's guide? of strokes, SG&A an any some in COGS with in XXXX, of of kind So that might or else or wondering, -- in efficiency type OpEx element might broad not is initiatives reoccur due

Keith Taylor

jump Well, perhaps maybe Adaire in this take let this, sort as I'll Jon, in of and appropriate. I'll case,

points it's incremental over I what's see consumed XXXX, delivering of revenue coming important to power, think basis margin to that -- that XXX can of down coming in we're come margins the at when year gets inversion very that. from that and business roughly experienced XX you But it's is we XXXX this to basis it's the certainly therefore, about on it course, you power the look basically suffice of lower related of points. up. then customer. XXXX and say, take and And can I just of to costs But going sort I talk quarter-over-quarter, what by revenue, back over really should inside XXXX. move

And so that's one thing.

like else power I decreasing. down continued just years. step electron although costs would seem but cost has like they've the couple feels being of overall customers unit consume more, of all to equal, cost, And it anticipate, year-over-year last the over been the

say force just extend XXXX, the basis sort improvement in second a bunch into quarter, that comes would from sort factors. many financial is to for that is and of you of points thing of clearly would if XXX the something reference impacting, XXXX that's is operational that One, of results I in well. as the reduction fourth The the will,

result, continue the we to reduce business. but it down, as will -- will 'XX improve -- we we we again, the will into and metal negative running business, to as was more continue that 'XX, one-off that EBITDA trend, to both revenues, a metal operational again, performance continue come the at over the over wind and but a 'XX certainly 'XX, As cost, end-of-life take

expense the And then capital in of for earn We're business. matrix. the I it's which you're the investing support scale Today the investing the you're take in commercial, with tomorrow, on business bearing staff in commercial, say, because side. the cost these to will cost to really what more on the alluded decisions really suffice of it's whether a of the in whether or to get assets flow-through larger our of we business. And side matrix. and it. part as remarks investing in a today profits that my the running associated we're prior in to and we And tripling -- we more the is order you on in to invest operationally capital the the size And operating plan bearing today, much going to that and need you're franchise to get it we nice to up of magnitude

So things would those say. I are the

$XX the the are about QX comment could average. really get wanted XXXX, we in QX it. sort spend just what get at and that maintenance, million vis-a-vis I we in In XX of about maintenance QX it if up. quarter. because to to And wanted then in of we margins. end a fourth quarter. impacted and average, repairs increased took of Again, front that's $XX where on -- we EBITDA We -- and the other million an to our QX, And quarter-over-quarter maybe make happened one Repairs

down As a result, mark. to roughly the first $XX you look we're the stepping million when in quarter, back

there's quarter-over-quarter a amount done so inside being that of maintenance the the And million is $XX in assets. swing

tells efficiency at to second near continued I performance we're of the business business. that half you the you operational them we the we'll depending margin XX% the sometimes we in about decisions But as the the the said, of year, QX. And out into look what a to just first target. or myself the and It is XXXX, about end to of QX make what year, the what make I you which the has we the the Adaire over that circumstances. the processes you talking for to push costs of -- change is haven't on and the with leave some really change step-up timing yet back when building to decision spent of systems, the you meaningful about As accelerate again, But team. at priority margins core it and is come the wanted see even everybody like. the half a But see or energy means

Operator

with next Del comes Our Nick Deo question MoffetNathanson. from

Nicholas Del Deo

talk a to bit want capacity I about constraints. First,

talked XXXX some that ago, have course you about in of prepared being that crimping some could markets year to that. absent and opened better markets. bookings capacity in key capacity in sales, address remarks a you the constraints facilities you Adaire, think I key your constraints been were there over noted

at front most unconstrained from seems perspective do the key markets? be like you'll when I it of of that ahead So your again. this on ball feel up and inventory cropped like guess, least across issue an has by you

Adaire Fox-Martin

Yes.

that pursuing are part strategy fact, our opportunity the is ensuring a constraints we build of see in vigor. we bolder So leaning And capacity with those that in absolutely into we're market.

which around our capacity X vary by Tier metros by of impacted region are Our constraints region this.

'XX You requirement guide, be deck years capacity Tier the expansion if where the course contiguous met could of much provided indication into the releasing have of customer available, over and an that metro. cases to meet follow. there capacity could in we a for absolutely that how we not And X customer. of we that would capacity much that see are had demand the It's would have that how and the our that come a year inventory will we we in which also in provides the true

underlying set, moment. a most The the demand-shape on or demonstrate has smaller very in we to of to in right in be the of offer. are global the what product firmly move on market But the basis. solution hot fortunate signals the cases, them to In center continue we reach very able the Equinix to at certainly, portfolio, demand so center, were relevance a is to and the that

very we value is focus strategy about and can really intent as XX to underway. in differentiated our our And of creation to campuses. projects portfolio efficient As have as bolder we can And to for to that major when my we demand. in capacity think in customer order we manner strategy mentioned as is on retail is to I construction enable xScale market build remarks has mentioned, these this larger streamline here for our a to customers, is particularly that some prepared much the have and this in meet build bring critical our retail deliver and our our retail in core our retail covered. faster a our markets. those design of capacity lean just And team cycle where which well focused portfolio, I as key aspects Keith goal is really

we least to the demand opportunity that that accelerated all bolder a that when within our review examples that to we at the the the we build a NYX, capacity. these opportunity have have year we we and we LDX, as And are placing we for of DCXX created a deliver customers. instance, of we been can have So that, demand have through that market that phases the -- our at this enable of are so number result to to that and provide see a of streamline result retail the us where projects will opportunity pipeline, capacity look lens that pipeline on as see

for requirements can. area best focus continuing of demands So we continuing customers of with ensure and their our as as area to engagement us, meet optimization possibly that we their continuing and

Nicholas Del Deo

support I There's That's wavelengths, demand on new of Great. or a AI. fiber of constructed. more lot helpful. Can to the Dark being -- a obviously routes market? for fiber one fiber activity ask lot

You years? alluded Zayo the large in terminate facilities. as meaningful Because activity going source remarks it that to example of be your prepared coming your in business imagine of going of that. Do some of to driver is wins a to with think this to an incremental is a you enough in be lot I'd

Adaire Fox-Martin

journey. all That's and differentiation that we And important we're Zayo partnership, and their network as support possible, back are to opportunity quite interconnected densely to reach, the And and service with come look will dense seeing I certainly the be just these that future unique crucially again, with opportunities. capitalize providers. proposition on to Equinix: would elements the value of global

Operator

comes from Citi. Michael with Rollins Our next question

Michael Rollins

earlier you've work that done mentioned segmentation. you of some the on Adaire,

look key so the verticals? you update as give X can at guidance paths. where certain an in you respect us if update do you underpenetrated with curious And give see an us being you to Equinix And customer XXXX to as if can

the And that as cabinet versus at growth terms customers then the expanding in of about about versus is spend? of path expansion? the second constant X% growth one think in how how So and think cabinet path, expanding you X% pricing you do that to look in you the currency MRR guide, per do revenue customer terms of on

Adaire Fox-Martin

the X to I there elements address just question them. that jotting make sure Michael. of your down I'm Thanks,

segmentation account of and enhancing very what exercise of to serve. how define and And a at looking base a our to these our different at kind serve undertook with segmentation really costs that's lenses. of been really focus what segmentation efficiency we looking and of operational we so first internally. our operational exercise, variety exercise our base customer of customers, So coverage, through the effectiveness the is the our in first And terms kind account kind comprehensive of what management, of output best customer where

segmentation your covering TAM various customers are through how That an lens to of the look then and being total at said, we actually where of it take your segments. the are opportunity and the TAM, does available different and it see in give the to market, we you

into portfolio in are We industry type smaller category, be a reach have that think a fall balanced But turnover, the is into might that point where and it have we industry, accounts business I very terms harder. general so our hard an revenue of across to don't that would to representation.

been sales that's where have much possible. Our make where your And you to focus reach play order that's in has can on that begins to and a enterprise really channel really customers. very motion digital

that we our also I the our as amendments remarks this was we had amendments acquisition. to my result year So that of our of is that done mentioned of compensation a around make actually to name new have in prepared compensation things plans. And the net to implementation some one one made plans

So an of only in enable account number how service. to point, the customers that existing not your Equinix but, expand us actually team the footprint expand the to

that So course during number on we uptick the year of in focus. based an that this see should

cabinets. And relevant then to question last the was

remind just need to Sorry, of that me might part Mike, your you of question.

Michael Rollins

Sure.

MRR X%, about per -- cabinet from do think So pricing of versus as contribution the look cabinet guide MRR the growth how growth you to at X% constant and revenue you currency growth?

Keith Taylor

that and Michael, jump in. can maybe I'll take Adaire Yes,

growth just in noise First, probably And fourth as the I I year-over-year. to really noise think we the quarter, the it's bit rate a little guidance. in where there's are of important said, understand on

So let me explain that.

know has to the -- we all quarter, bottom. currencies the us impacted currency fourth down way revenue the For both from the

to not There $XX that anticipating was close it close. million. to QX also the that $XX in fourth it did we were million fees related quarter, of nonrecurring As was

that top in has vast And in happened range. in the the put That so QX. happen have the to would us majority guidance fact, will already And end QX. it of of

So that's good.

to to So million little we of the FX. got there's to the a start to over think -- X% X%. I $XXX then 'XX 'XX, want when about There's rate growth how you reconcile bit for

strength xScale so have in the typically $XXX we going million of for a structure, in take to dollar it. we Reduced roughly the then guide, least year outside or fit-out $XX the based million, the throughout that's a And not? don't impact of of view million. costs at And we're continue metal, the franchise, a we've do, can Are to million. of power rest on But cost everybody which $XX JV just fit-outs reduction. on but $XX reducing the couple booked,

So the you see look is when at that, you overall, how business performing.

we business, when Having will the look said you'll density, bookings. you density. from gross That absolutely higher of all I or anticipate continued should just say, increased that, at higher see come so course, fundamental adds That the for or of itself MRR number the cabinet things and determined. to the into presents system But higher how the it density, good be cabinet. cabinet still does of per is that

good we what with we that. backlog, is -- adds know the guide In have to when XXXX. my churn, given we online, think into prepared continued think remarks, is the we always inventory There'll I but given be visibility some aberrations you into some we'll coming cabinet

So that. that's how I think about

it X% assets. to our price, also comes but more actions. of or XX% cross-connects pricing, price -- come Adaire from does think, stabilized represent stabilized from presents relates XXXX, to. again, X% to it alluded we comes it volume gross How positive that from have net and on on envision still will again, basis, that we As we'll about positive growth That in itself bookings. And a our pricing as

gives happening. bit of hopefully, little you So a that sense of what's

just maybe other because one I can important. thing it's I If say think

QX, QX is QX, the currency. between As the you at is million of coming the lion's degradation look $XX difference share from and

nonrecurring then $XX you coming fees. gives sense. it you, is as But $XX a told moved from we I million million. And So lower

it would So have been million. $XX

than how more you and So see of really excited the that we it back -- a consuming, there's customers And come inventory deal of sell can the positioning. larger, and Adaire, as is marketplace. probably asking, you we lot we it's need impacted goes core the QX as in where that's the over us and year. it's allow And bigger, maybe assets more the to But put are, a size up what heard despite and online assets gives as we're selling -- we're we're year. to out -- QX can where dense average over to we the noise really that just we a fast some is from customer Nick the that faster and anticipated, that's getting getting the the to and the sense, to going between about was getting constraints of part more the

Operator

Our last question Goldman from comes Jim with Sachs. Schneider

James Schneider

wondering was I you basis trends, the maybe not mistaken, I'm basis you're the what I your over And course that of if of in? could would on then revenue recurring X% about year? comment the reaccelerate your actually the year, points can on revenue sort guess XXXX deceleration, XX underlying guiding drivers the revenue level you for heading and doing by of revenue be can growth to is what confidence is And outlook of XXXX. comment XXX that all decelerated point that? you X% what another last to sort into if

Adaire Fox-Martin

I'll perhaps of then first a for stab, have the I'll some take numbers and you. Keith decompose

that of of $XX the our stepping mentioned, with revenue I a of the recurring And That strong you revenue. for in $XX XXXX. up implied is $XX the circa over think year, exit year us the in in very in type much you've guidance this from revenue as million recurring step-up recurring for implied QX, guide into into XXXX, that's a the growth line growth our -- million performance a course So and step-up, during see course category 'XX. giving very million is then

this because grow. happy recurring revenue us to core element So and a I'm and is of allows business key really plan very our that consistently element about

of As from and market. very demand signal we're support the clear have think a very strong to in already, very revenue, this I continue firmly to compelling the and I see this and mentioned backlog center

in that very XXXX, we So course out expansion. much as course, as into we strong gross the can we it quickly and of taking points basis ensure revenue that XXX that taking whilst order that bookings records of and look the have turning to that we're you've delivering doing over margin the to forward exit of possibly in seen and 'XX,

stepping context. So but on up our revenue, not just recurring a it delivering in profitable

to at? Keith, is on do where mechanics you of that the there that's anything wanted

Keith Taylor

to summarize said. Adaire just So what Jim, maybe

is coming flat. which all revenues is growth would recurring and generally to as -- say, so going -- from 'XX nonrecurring that So we be to basically line, is I the look flat

And growth the recurring from so all coming is that line.

everybody, teams, the in anybody the And this as fourth we would sold more. it's important, then inventory. just more really need better Ralph well and quarter, we have as had than knows construction reminding If we the inventory

ability just Our to backlog continue the at have accelerate to market. high. that the topline. is deliver we we to make into near an the all-time can gives sure And the capacity continue And that to you

James Schneider

whether significant next capacity few or lot been market, follow-up a a Maybe of the announcements Stargate that just about the over is otherwise, in There's as question. additions years.

wondering makes your to if relative forward. it GIC own JV anything earlier to which capacity So add do feel actually is further to that Anything pace differently I going CPP you're going online comment about you bring was could your accelerate And via that xScale to comment? and the there you with the per capacity with you JV? addition that can

Adaire Fox-Martin

Yes.

earlier, a some as we've of And mentioned I obviously, to terms the data in very announcements So continued center this focus seen, on central that of the that. we're is industry.

this all of particular tide. that can announcements rise supportive boats we on like very we're that feel So because

earnings hyperscalers' the have this to from recent of we, stories investment relates CapEx in from of their how own terms our their course, own seen announcements. plans, In continued

step the is any to So it term. this in there away short seem from that desire doesn't

So that we feel a there of lot pursue. in us for is opportunity market to the

leased outside mentioned and looking we're to have and already, already find the we develop on next at Americas sites Hamptons, to have we've xScale, site. those pre-leased of begun that one XX% the projects the that we work in pipeline. the As Under the across

very remain this much capture of we that as we focused can opportunity as ensuring possible. So on

execute The and and of deliver market. it we on against second and part an our strategy, bolder, second to build xScale focused that phase how as pipeline or the because pipeline is is that fast the capacity

Chip Newcom

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

Equinix (EQIX) 12 Feb 252024 Q4 Earnings call transcript