Equinix Reports First Quarter 2016 Results
First Quarter 2016 Results Summary
- Revenues from continuing operations
$844.2 million , a 16% increase over the previous quarter- Includes
$34.2 million of revenues from Bit-isle - Includes
$84.4 million of revenues fromTelecity
- Operating Income
$112.7 million , a 17% decrease from the previous quarter
- Adjusted EBITDA
$380.7 million , a 45% adjusted EBITDA margin- Includes
$11.6 million of adjusted EBITDA from Bit-isle - Includes
$40.7 million of adjusted EBITDA fromTelecity - Includes
$13.3 million of integration costs
- Net Loss from Continuing Operations
$37.3 million
- AFFO
$209.8 million , an 18% increase over the previous quarter- Includes
$63.5 million of foreign currency losses related to theTelecity transaction and$13.3 million of integration costs
2016 Annual Guidance Summary
- Revenues from continuing operations
- >
$3,595.0 million , a 32% increase over the previous year; an organic and constant currency growth rate of greater than 13.4% - Assumes
$565.0 million in revenues fromTelecity and Bit-isle
- >
- Adjusted EBITDA
- >
$1,650.0 million or a 45.9% adjusted EBITDA margin - Assumes 100 basis point YoY improvement in adjusted EBITDA for the
Equinix organic business - Assumes
$255.0 million of adjusted EBITDA fromTelecity and Bit-isle - Assumes
$55.0 million of integration costs for acquisitions
- >
- AFFO
- >
$1,015.0 million , a 22% increase over the previous year - Assumes a
$63.5 million foreign currency loss related to theTelecity acquisition - Assumes
$55.0 million of integration costs for acquisitions
- >
This quarter includes the quarterly results of Bit-isle and
Revenues from continuing operations were
"2016 is off to a strong start with both revenue and adjusted EBITDA above the top end of our guidance ranges for the first quarter," said
Cost of revenues was
Selling, general and administrative expenses were
Interest expense was
The Company recorded an income tax benefit from continuing operations of
Net income from discontinued operations was
Net loss from continuing operations was
Income from continuing operations was
Adjusted funds from operations ("AFFO"), as defined below, were
Capital expenditures, defined as gross capital expenditures less the net change in accrued property, plant and equipment in the first quarter, were
The Company generated cash from operating activities of
As of
Business Outlook
For the second quarter of 2016, the Company expects revenues to range between
For the full year of 2016, total revenues are expected to be greater than
The U.S. dollar exchange rates used for 2016 guidance, taking into consideration the impact of our foreign currency hedges, have been updated to
The guidance provided above is forward-looking and includes the impact of the Company's acquisition of
Q1 Results Conference Call and Replay Information
The Company will discuss its quarterly results for the period ended
A replay of the call will be available one hour after the call, through
Investor Presentation and Supplemental Financial Information
The Company has made available on its website a presentation designed to accompany the discussion of the Company's results and future outlook, along with certain supplemental financial information and other data. Interested parties may access this information through the Company's Investor Relations website at www.equinix.com/investors.
Additional Resources
About
Non-GAAP Financial Measures
The Company provides all information required in accordance with generally accepted accounting principles ("GAAP"), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, the Company uses non-GAAP financial measures to evaluate its operations.
In presenting non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow, the Company excludes certain items that it believes are not good indicators of the Company's current or future operating performance. These items are depreciation, amortization, accretion of asset retirement obligations and accrued restructuring charges, stock-based compensation, restructuring charges, impairment charges, acquisition costs, and gains on asset sales. The Company excludes these items in order for its lenders, investors, and the industry analysts who review and report on the Company to better evaluate the Company's operating performance and cash spending levels relative to its industry sector and competitors.
The Company excludes depreciation expense as these charges primarily relate to the initial construction costs of an IBX center, and do not reflect its current or future cash spending levels to support its business. Its IBX centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of an IBX center do not recur with respect to such data center, although the Company may incur initial construction costs in future periods with respect to additional IBX centers, and future capital expenditures remain minor relative to the initial investment. This is a trend it expects to continue. In addition, depreciation is also based on the estimated useful lives of the IBX centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our IBX centers, and are not indicative of current or expected future capital expenditures. Therefore, the Company excludes depreciation from its operating results when evaluating its operations.
In addition, in presenting the non-GAAP financial measures, the Company also excludes amortization expense related to certain intangible assets, as it is not meaningful in evaluating the Company's current or future operating performance. The Company excludes accretion expense, both as it relates to its asset retirement obligations as well as its accrued restructuring charges, as these expenses represent costs which the Company also believes are not meaningful in evaluating the Company's current operations. The Company excludes stock-based compensation expense as it represents expense attributed to equity awards that have no current or future cash obligations. As such, the Company, and many investors and analysts, exclude this stock-based compensation expense when assessing the cash generating performance of our operations. The Company excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to the Company's decision to exit leases for excess space adjacent to several of its IBX centers, which it did not intend to build out, or its decision to reverse such restructuring charges. The Company also excludes impairment charges related to certain long-lived assets. The impairment charges are related to expense recognized whenever events or changes in circumstances indicate that the carrying amount of long-lived assets are not recoverable. The Company also excludes gains on asset sales as it represents profit that may not recur and is not meaningful in evaluating the current or future operating performance. Finally, the Company excludes acquisition costs from its non-GAAP financial measures. The acquisition costs relate to costs the Company incurs in connection with business combinations. Management believes items such as restructuring charges, impairment charges, acquisition costs, and gains on asset sales are non-core transactions; however, these types of costs may occur in future periods.
The Company presents adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA represents income or loss from operations plus depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, acquisition costs and gains on asset sales.
The Company also presents funds from operations ("FFO") and adjusted funds from operations ("AFFO"), which are non-GAAP financial measures commonly used in the REIT industry. FFO is calculated in accordance with the definition established by the
The Company includes an adjustment for revenue from installation fees, since installation fees are deferred and recognized ratably over the expected life of the installation, although the fees are generally paid in a lump sum upon installation. The Company includes an adjustment for straight-line rent expense on its operating leases, since the total minimum lease payments are recognized ratably over the lease term, although the lease payments generally increase over the lease term. The adjustments for both installation revenue and straight-line rent expense are intended to isolate the cash activity included within the straight-lined or amortized results in the consolidated statement of operations. The Company excludes the amortization of deferred financing costs as these expenses relate to the initial costs incurred in connection with its debt financings that have no current or future cash obligations. The Company excludes gains (losses) on debt extinguishment since it represents a cost that may not recur and is not a good indicator of the Company's current or future operating performance. The Company includes an income tax expense adjustment, which represents changes in its income tax reserves and valuation allowances that may not recur or may not relate to the current year's operations. The Company also excludes recurring capital expenditures, which represent expenditures to extend the useful life of its IBX centers or other assets that are required to support current revenues. The Company also excludes net income from discontinued operations, net of tax, which represents profit that may not recur and is not a good indicator of our current or future operating performance.
Non-GAAP financial measures are not a substitute for financial information prepared in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation, but should be considered together with the most directly comparable GAAP financial measures and the reconciliation of the non-GAAP financial measures to the most directly comparable GAPP financials measures. The Company presents such non-GAAP financial measures to provide investors with an additional tool to evaluate our operating results in a manner that focuses on what management believes to be its core, ongoing business operations. Management believes that the inclusion of these non-GAAP financial measures provides consistency and comparability with past reports and provides a better understanding of the overall performance of the business and its ability to perform in subsequent periods. The Company believes that if it did not provide such non-GAAP financial information, investors would not have all the necessary data to analyze the Company effectively.
Investors should note that the non-GAAP financial measures used by the Company may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as those of other companies. Investors should, therefore, exercise caution when comparing non-GAAP financial measures used by us to similarly titled non-GAAP financial measures of other companies.
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering
EQUINIX, INC. |
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||
(in thousands, except per share data) |
|||||||||
(unaudited) |
|||||||||
Three Months Ended |
|||||||||
March 31, |
December 31, |
March 31, |
|||||||
2016 |
2015 |
2015 |
|||||||
Recurring revenues |
$ 797,094 |
$ 686,072 |
$ 609,657 |
||||||
Non-recurring revenues |
47,062 |
44,390 |
33,517 |
||||||
Revenues |
844,156 |
730,462 |
643,174 |
||||||
Cost of revenues |
427,680 |
351,968 |
298,313 |
||||||
Gross profit |
416,476 |
378,494 |
344,861 |
||||||
Operating expenses: |
|||||||||
Sales and marketing |
106,590 |
88,439 |
78,616 |
||||||
General and administrative |
165,904 |
136,829 |
113,640 |
||||||
Acquisition costs |
36,536 |
17,349 |
1,156 |
||||||
Gains on asset sales |
(5,242) |
- |
- |
||||||
Total operating expenses |
303,788 |
242,617 |
193,412 |
||||||
Income from continuing operations |
112,688 |
135,877 |
151,449 |
||||||
Interest and other income (expense): |
|||||||||
Interest income |
925 |
1,206 |
520 |
||||||
Interest expense |
(100,863) |
(79,499) |
(68,791) |
||||||
Loss on debt extinguishment |
- |
(289) |
- |
||||||
Other expense |
(60,710) |
(48,617) |
(514) |
||||||
Total interest and other, net |
(160,648) |
(127,199) |
(68,785) |
||||||
Income (loss) from continuing operations before income taxes |
(47,960) |
8,678 |
82,664 |
||||||
Income tax benefit (expense) |
10,633 |
2,053 |
(6,212) |
||||||
Net income (loss) from continuing operations |
(37,327) |
10,731 |
76,452 |
||||||
Net income from discontinued operations, net of tax |
6,216 |
- |
- |
||||||
Net income (loss) |
$ (31,111) |
$ 10,731 |
$ 76,452 |
||||||
Net income (loss) per share: |
|||||||||
Basic net income (loss) per share from continuing operations |
$ (0.55) |
$ 0.18 |
$ 1.35 |
||||||
Basic net income (loss) per share from discontinued operations |
0.09 |
- |
- |
||||||
Basic net income (loss) per share |
$ (0.46) |
$ 0.18 |
$ 1.35 |
||||||
Diluted net income (loss) per share from continuing operations |
$ (0.55) |
$ 0.18 |
$ 1.34 |
||||||
Diluted net income (loss) per share from discontinued operations |
0.09 |
- |
- |
||||||
Diluted net income (loss) per share |
$ (0.46) |
$ 0.18 |
$ 1.34 |
||||||
Shares used in computing basic net income (loss) per share |
68,132 |
60,393 |
56,661 |
||||||
Shares used in computing diluted net income (loss) per share |
68,132 |
60,943 |
57,227 |
EQUINIX, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
Three Months Ended |
||||||||
March 31, |
December 31, |
March 31, |
||||||
2016 |
2015 |
2015 |
||||||
Net income (loss) |
$ (31,111) |
$ 10,731 |
$ 76,452 |
|||||
Other comprehensive income (loss), net of tax: |
||||||||
Foreign currency translation adjustment ("CTA") gain (loss) |
111,415 |
(37,217) |
(146,311) |
|||||
Unrealized gain (loss) on available-for-sale securities |
(304) |
(139) |
103 |
|||||
Unrealized gain (loss) on cash flow hedges |
(6,784) |
4,975 |
10,556 |
|||||
Net investment hedge CTA gain (loss) |
(11,828) |
10,447 |
- |
|||||
Net actuarial gain on defined benefit plans |
6 |
887 |
59 |
|||||
Other comprehensive income (loss), net of tax: |
92,505 |
(21,047) |
(135,593) |
|||||
Comprehensive income (loss), net of tax |
61,394 |
(10,316) |
(59,141) |
EQUINIX, INC. |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(in thousands) |
||||||
(unaudited) |
||||||
Assets |
March 31, |
December 31, |
||||
2016 |
2015 |
|||||
Cash and cash equivalents |
$ 633,758 |
$ 2,228,838 |
||||
Short-term investments |
12,353 |
12,875 |
||||
Accounts receivable, net |
326,440 |
291,964 |
||||
Current portion of restricted cash |
3,420 |
479,417 |
||||
Other current assets |
236,466 |
212,929 |
||||
Assets held for sale |
955,904 |
33,257 |
||||
Total current assets |
2,168,341 |
3,259,280 |
||||
Long-term investments |
3,969 |
4,584 |
||||
Property, plant and equipment, net |
6,888,232 |
5,606,436 |
||||
Goodwill |
3,336,968 |
1,063,200 |
||||
Intangible assets, net |
867,536 |
224,565 |
||||
Other assets |
230,789 |
198,630 |
||||
Total assets |
$ 13,495,835 |
$ 10,356,695 |
||||
Liabilities and Stockholders' Equity |
||||||
Accounts payable and accrued expenses |
$ 475,343 |
$ 400,948 |
||||
Accrued property and equipment |
124,684 |
103,107 |
||||
Current portion of capital lease and other financing obligations |
48,325 |
40,121 |
||||
Current portion of mortgage and loans payable |
487,065 |
770,236 |
||||
Current portion of convertible debt |
148,282 |
146,121 |
||||
Other current liabilities |
171,925 |
192,286 |
||||
Liabilities held for sale |
124,571 |
3,535 |
||||
Total current liabilities |
1,580,195 |
1,656,354 |
||||
Capital lease and other financing obligations, less current portion |
1,552,145 |
1,287,139 |
||||
Mortgage and loans payable, less current portion |
1,139,807 |
472,769 |
||||
Senior notes |
3,806,167 |
3,804,634 |
||||
Other liabilities |
598,416 |
390,413 |
||||
Total liabilities |
8,676,730 |
7,611,309 |
||||
Common stock |
69 |
62 |
||||
Additional paid-in capital |
6,973,460 |
4,838,444 |
||||
Treasury stock |
(6,635) |
(7,373) |
||||
Accumulated dividends |
(1,591,908) |
(1,468,472) |
||||
Accumulated other comprehensive loss |
(416,554) |
(509,059) |
||||
Accumulated deficit |
(139,327) |
(108,216) |
||||
Total stockholders' equity |
4,819,105 |
2,745,386 |
||||
Total liabilities and stockholders' equity |
$ 13,495,835 |
$ 10,356,695 |
||||
Ending headcount by geographic region is as follows: |
||||||
Americas headcount |
2,371 |
2,329 |
||||
EMEA headcount |
2,019 |
1,188 |
||||
Asia-Pacific headcount |
1,326 |
1,525 |
||||
Total headcount |
5,716 |
5,042 |
EQUINIX, INC. |
||||||
SUMMARY OF DEBT PRINCIPAL OUTSTANDING |
||||||
(in thousands) |
||||||
(unaudited) |
||||||
March 31, |
December 31, |
|||||
2016 |
2015 |
|||||
Capital lease and other financing obligations |
$ 1,600,470 |
$ 1,327,260 |
||||
Term loan, net of debt discount and debt issuance costs |
1,124,490 |
454,503 |
||||
Brazil financings, net of debt issuance costs |
28,473 |
26,668 |
||||
Mortgage payable and other loans payable |
473,909 |
436,212 |
||||
Revolving credit facility borrowings |
- |
325,622 |
||||
Plus: debt discount, debt issuance costs and premium, net |
13,830 |
694 |
||||
Total mortgage and loans payable principal |
1,640,702 |
1,243,699 |
||||
Senior notes, net of debt issuance costs |
3,806,167 |
3,804,634 |
||||
Plus: debt issuance costs |
43,833 |
45,366 |
||||
Total senior notes principal |
3,850,000 |
3,850,000 |
||||
Convertible debt, net of debt discount and debt issuance costs |
148,282 |
146,121 |
||||
Plus: debt discount and debt issuance costs |
1,800 |
3,961 |
||||
Total convertible debt principal |
150,082 |
150,082 |
||||
Total debt principal outstanding |
$ 7,241,254 |
$ 6,571,041 |
EQUINIX, INC. |
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||
(in thousands) |
|||||||||
(unaudited) |
|||||||||
Three Months Ended |
|||||||||
March 31, |
December 31, |
March 31, |
|||||||
2016 |
2015 |
2015 |
|||||||
Cash flows from operating activities: |
|||||||||
Net income (loss) |
$ (31,111) |
$ 10,731 |
$ 76,452 |
||||||
Adjustments to reconcile net income (loss) to net cash |
|||||||||
provided by operating activities: |
|||||||||
Depreciation, amortization and accretion |
202,153 |
144,861 |
122,530 |
||||||
Stock-based compensation |
34,061 |
33,868 |
30,613 |
||||||
Amortization of debt issuance costs and debt discounts |
5,508 |
4,493 |
3,774 |
||||||
Gains on asset sales |
(5,242) |
- |
- |
||||||
Other items |
4,871 |
5,741 |
4,162 |
||||||
Changes in operating assets and liabilities: |
|||||||||
Accounts receivable |
(11,312) |
(2,581) |
(30,791) |
||||||
Income taxes, net |
(28,656) |
(25,056) |
(12,555) |
||||||
Accounts payable and accrued expenses |
(40,217) |
33,906 |
29,693 |
||||||
Other assets and liabilities |
(25,785) |
29,155 |
8,933 |
||||||
Net cash provided by operating activities |
104,270 |
235,118 |
232,811 |
||||||
Cash flows from investing activities: |
|||||||||
Purchases, sales and maturities of investments, net |
3,419 |
(9,369) |
(4,706) |
||||||
Business acquisitions, net of cash acquired |
(1,601,627) |
(235,306) |
(10,247) |
||||||
Purchases of real estate |
(16,408) |
- |
(38,282) |
||||||
Purchases of other property, plant and equipment |
(197,700) |
(280,612) |
(150,120) |
||||||
Proceeds from asset sales |
22,825 |
- |
- |
||||||
Other investing activities |
466,704 |
(3,709) |
3,521 |
||||||
Net cash used in investing activities |
(1,322,787) |
(528,996) |
(199,834) |
||||||
Cash flows from financing activities: |
|||||||||
Proceeds from employee equity awards |
16,304 |
185 |
16,384 |
||||||
Payment of dividend distributions |
(124,836) |
(230,452) |
(96,619) |
||||||
Proceeds from public offering of common stock, net of issuance costs |
- |
829,496 |
- |
||||||
Proceeds from loans payable |
701,250 |
707,108 |
- |
||||||
Proceeds from senior notes |
- |
1,100,000 |
- |
||||||
Repayment of capital lease and other financing obligations |
(33,232) |
(8,450) |
(5,296) |
||||||
Repayment of mortgage and loans payable |
(936,353) |
(185,823) |
(13,361) |
||||||
Other financing activities |
499 |
(19,114) |
98 |
||||||
Net cash provided by (used in) financing activities |
(376,368) |
2,192,950 |
(98,794) |
||||||
Effect of foreign currency exchange rates on cash and cash equivalents |
(195) |
(5,703) |
(8,391) |
||||||
Net increase (decrease) in cash and cash equivalents |
(1,595,080) |
1,893,369 |
(74,208) |
||||||
Cash and cash equivalents at beginning of period |
2,228,838 |
335,469 |
610,917 |
||||||
Cash and cash equivalents at end of period |
$ 633,758 |
$ 2,228,838 |
$ 536,709 |
||||||
Supplemental cash flow information: |
|||||||||
Cash paid for taxes |
$ 19,215 |
$ 29,165 |
$ 14,538 |
||||||
Cash paid for interest |
$ 74,540 |
$ 73,044 |
$ 23,976 |
||||||
Free cash flow (1) |
$ (1,221,936) |
$ (284,509) |
$ 37,683 |
||||||
Adjusted free cash flow (2) |
$ 396,663 |
$ (33,081) |
$ 87,666 |
||||||
(1) |
We define free cash flow as net cash provided by operating activities plus net cash provided by (used in) investing activities |
||||||||
(excluding the net purchases, sales and maturities of investments) as presented below: |
|||||||||
Net cash provided by operating activities as presented above |
$ 104,270 |
$ 235,118 |
$ 232,811 |
||||||
Net cash used in investing activities as presented above |
(1,322,787) |
(528,996) |
(199,834) |
||||||
Purchases, sales and maturities of investments, net |
(3,419) |
9,369 |
4,706 |
||||||
Free cash flow (negative free cash flow) |
$ (1,221,936) |
$ (284,509) |
$ 37,683 |
||||||
(2) |
We define adjusted free cash flow as free cash flow (as defined above) excluding any purchases of real estate, acquisitions, |
||||||||
any excess tax benefits from employee equity awards, cash paid for taxes associated with reclassifying our assets for |
|||||||||
tax purposes triggered by our conversion into a real estate investment trust ("REIT") and costs related to the |
|||||||||
REIT conversion, as presented below: |
|||||||||
Free cash flow (as defined above) |
$ (1,221,936) |
$ (284,509) |
$ 37,683 |
||||||
Less business acquisitions, net of cash |
1,601,627 |
235,306 |
10,247 |
||||||
Less purchases of real estate |
16,408 |
- |
38,282 |
||||||
Less excess tax benefits from employee equity awards |
564 |
(1,633) |
708 |
||||||
Less cash paid for taxes resulting from the REIT conversion |
- |
17,306 |
- |
||||||
Less costs related to the REIT conversion |
- |
449 |
746 |
||||||
Adjusted free cash flow |
$ 396,663 |
$ (33,081) |
$ 87,666 |
||||||
We categorize our cash paid for taxes into cash paid for taxes resulting from the REIT conversion (as defined above) and |
|||||||||
other cash taxes paid. |
|||||||||
Cash paid for taxes resulting from the REIT conversion |
$ - |
$ 17,306 |
$ - |
||||||
Other cash taxes paid |
19,215 |
11,859 |
14,538 |
||||||
Total cash paid for taxes |
$ 19,215 |
$ 29,165 |
$ 14,538 |
EQUINIX, INC. |
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FROM CONTINUING OPERATIONS - NON-GAAP PRESENTATION |
|||||||||
(in thousands) |
|||||||||
(unaudited) |
|||||||||
Three Months Ended |
|||||||||
March 31, |
December 31, |
March 31, |
|||||||
2016 |
2015 |
2015 |
|||||||
Recurring revenues |
$ 797,094 |
$ 686,072 |
$ 609,657 |
||||||
Non-recurring revenues |
47,062 |
44,390 |
33,517 |
||||||
Revenues (1) |
844,156 |
730,462 |
643,174 |
||||||
Cash cost of revenues (2) |
271,100 |
227,956 |
192,130 |
||||||
Cash gross profit (3) |
573,056 |
502,506 |
451,044 |
||||||
Cash operating expenses (4): |
|||||||||
Cash sales and marketing expenses (5) |
79,692 |
72,069 |
63,820 |
||||||
Cash general and administrative expenses (6) |
112,714 |
97,292 |
81,476 |
||||||
Total cash operating expenses (7) |
192,406 |
169,361 |
145,296 |
||||||
Adjusted EBITDA (8) |
$ 380,650 |
$ 333,145 |
$ 305,748 |
||||||
Cash gross margins (9) |
68% |
69% |
70% |
||||||
Adjusted EBITDA margins (10) |
45% |
46% |
48% |
||||||
Adjusted EBITDA flow-through rate (11) |
42% |
27% |
225% |
||||||
FFO (12) |
$ 115,875 |
$ 131,483 |
$ 179,190 |
||||||
AFFO (13) |
$ 209,846 |
$ 178,293 |
$ 221,756 |
||||||
Basic FFO per share (14) |
$ 1.70 |
$ 2.18 |
$ 3.16 |
||||||
Diluted FFO per share (14) |
$ 1.68 |
$ 2.14 |
$ 3.09 |
||||||
Basic AFFO per share (15) |
$ 3.08 |
$ 2.95 |
$ 3.91 |
||||||
Diluted AFFO per share (15) |
$ 2.98 |
$ 2.85 |
$ 3.77 |
||||||
(1) |
The geographic split of our revenues on a services basis is presented below: |
||||||||
Americas Revenues: |
|||||||||
Colocation |
$ 282,321 |
$ 275,779 |
$ 257,932 |
||||||
Interconnection |
85,936 |
83,168 |
75,086 |
||||||
Managed infrastructure |
11,170 |
10,974 |
13,295 |
||||||
Other |
729 |
817 |
741 |
||||||
Recurring revenues |
380,156 |
370,738 |
347,054 |
||||||
Non-recurring revenues |
24,238 |
23,751 |
16,915 |
||||||
Revenues |
404,394 |
394,489 |
363,969 |
||||||
EMEA Revenues: |
|||||||||
Colocation |
214,178 |
146,879 |
132,735 |
||||||
Interconnection |
19,700 |
16,775 |
13,048 |
||||||
Managed infrastructure |
18,560 |
7,619 |
5,783 |
||||||
Other |
943 |
862 |
1,858 |
||||||
Recurring revenues |
253,381 |
172,135 |
153,424 |
||||||
Non-recurring revenues |
14,475 |
10,519 |
11,199 |
||||||
Revenues |
267,856 |
182,654 |
164,623 |
||||||
Asia-Pacific Revenues: |
|||||||||
Colocation |
123,394 |
112,498 |
90,878 |
||||||
Interconnection |
21,569 |
18,979 |
13,524 |
||||||
Managed infrastructure |
15,006 |
9,447 |
4,777 |
||||||
Other |
3,588 |
2,275 |
- |
||||||
Recurring revenues |
163,557 |
143,199 |
109,179 |
||||||
Non-recurring revenues |
8,349 |
10,120 |
5,403 |
||||||
Revenues |
171,906 |
153,319 |
114,582 |
||||||
Worldwide Revenues: |
|||||||||
Colocation |
619,893 |
535,156 |
481,545 |
||||||
Interconnection |
127,205 |
118,922 |
101,658 |
||||||
Managed infrastructure |
44,736 |
28,040 |
23,855 |
||||||
Other |
5,260 |
3,954 |
2,599 |
||||||
Recurring revenues |
797,094 |
686,072 |
609,657 |
||||||
Non-recurring revenues |
47,062 |
44,390 |
33,517 |
||||||
Revenues |
$ 844,156 |
$ 730,462 |
$ 643,174 |
||||||
(2) |
We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compensation as presented below: |
||||||||
Cost of revenues |
$ 427,680 |
$ 351,968 |
$ 298,313 |
||||||
Depreciation, amortization and accretion expense |
(153,583) |
(121,505) |
(103,877) |
||||||
Stock-based compensation expense |
(2,997) |
(2,507) |
(2,306) |
||||||
Cash cost of revenues |
$ 271,100 |
$ 227,956 |
$ 192,130 |
||||||
The geographic split of our cash cost of revenues is presented below: |
|||||||||
Americas cash cost of revenues |
$ 109,020 |
$ 107,640 |
$ 95,162 |
||||||
EMEA cash cost of revenues |
101,509 |
64,089 |
58,494 |
||||||
Asia-Pacific cash cost of revenues |
60,571 |
56,227 |
38,474 |
||||||
Cash cost of revenues |
$ 271,100 |
$ 227,956 |
$ 192,130 |
||||||
(3) |
We define cash gross profit as revenues less cash cost of revenues (as defined above). |
||||||||
(4) |
We define cash operating expenses as operating expenses less depreciation, amortization, stock-based compensation and acquisition costs. We also refer to cash operating expenses as cash selling, general and administrative expenses or "cash SG&A". |
||||||||
(5) |
We define cash sales and marketing expenses as sales and marketing expenses less depreciation, amortization and stock-based compensation as presented below: |
||||||||
Sales and marketing expenses |
$ 106,590 |
$ 88,439 |
$ 78,616 |
||||||
Depreciation and amortization expense |
(17,127) |
(7,329) |
(6,085) |
||||||
Stock-based compensation expense |
(9,771) |
(9,041) |
(8,711) |
||||||
Cash sales and marketing expenses |
$ 79,692 |
$ 72,069 |
$ 63,820 |
||||||
(6) |
We define cash general and administrative expenses as general and administrative expenses less depreciation, amortization and stock-based compensation as presented below: |
||||||||
General and administrative expenses |
$ 165,904 |
$ 136,829 |
$ 113,640 |
||||||
Depreciation and amortization expense |
(31,443) |
(16,027) |
(12,568) |
||||||
Stock-based compensation expense |
(21,747) |
(23,510) |
(19,596) |
||||||
Cash general and administrative expenses |
$ 112,714 |
$ 97,292 |
$ 81,476 |
||||||
(7) |
Our cash operating expenses, or cash SG&A, as defined above, is presented below: |
||||||||
Cash sales and marketing expenses |
$ 79,692 |
$ 72,069 |
$ 63,820 |
||||||
Cash general and administrative expenses |
112,714 |
97,292 |
81,476 |
||||||
Cash SG&A |
$ 192,406 |
$ 169,361 |
$ 145,296 |
||||||
The geographic split of our cash operating expenses, or cash SG&A, is presented below: |
|||||||||
Americas cash SG&A |
$ 110,914 |
$ 106,035 |
$ 96,073 |
||||||
EMEA cash SG&A |
54,858 |
36,971 |
30,098 |
||||||
Asia-Pacific cash SG&A |
26,634 |
26,355 |
19,125 |
||||||
Cash SG&A |
$ 192,406 |
$ 169,361 |
$ 145,296 |
||||||
(8) |
We define adjusted EBITDA as income from continuning operations plus depreciation, amortization, accretion, stock-based compensation expense, acquisition costs and gains on asset sales as presented below: |
||||||||
Income from continuing operations |
$ 112,688 |
$ 135,877 |
$ 151,449 |
||||||
Depreciation, amortization and accretion expense |
202,153 |
144,861 |
122,530 |
||||||
Stock-based compensation expense |
34,515 |
35,058 |
30,613 |
||||||
Acquisition costs |
36,536 |
17,349 |
1,156 |
||||||
Gains on asset sales |
(5,242) |
- |
- |
||||||
Adjusted EBITDA |
$ 380,650 |
$ 333,145 |
$ 305,748 |
||||||
The geographic split of our adjusted EBITDA is presented below: |
|||||||||
Americas income from continuing operations |
$ 88,539 |
$ 83,425 |
$ 81,466 |
||||||
Americas depreciation, amortization and accretion expense |
76,720 |
73,023 |
66,811 |
||||||
Americas stock-based compensation expense |
24,329 |
25,576 |
23,491 |
||||||
Americas acquisition costs |
114 |
(1,210) |
966 |
||||||
Americas gains on asset sales |
(5,242) |
- |
- |
||||||
Americas adjusted EBITDA |
184,460 |
180,814 |
172,734 |
||||||
EMEA income from continuing operations |
(7,419) |
34,011 |
45,541 |
||||||
EMEA depreciation, amortization and accretion expense |
76,488 |
30,434 |
26,693 |
||||||
EMEA stock-based compensation expense |
6,235 |
4,348 |
3,607 |
||||||
EMEA acquisition costs |
36,185 |
12,801 |
190 |
||||||
EMEA adjusted EBITDA |
111,489 |
81,594 |
76,031 |
||||||
Asia-Pacific income from continuing operations |
31,568 |
18,441 |
24,442 |
||||||
Asia-Pacific depreciation, amortization and accretion expense |
48,945 |
41,404 |
29,026 |
||||||
Asia-Pacific stock-based compensation expense |
3,951 |
5,134 |
3,515 |
||||||
Asia-Pacific acquisition costs |
237 |
5,758 |
- |
||||||
Asia-Pacific adjusted EBITDA |
84,701 |
70,737 |
56,983 |
||||||
Adjusted EBITDA |
$ 380,650 |
$ 333,145 |
$ 305,748 |
||||||
(9) |
We define cash gross margins as cash gross profit divided by revenues. |
||||||||
Our cash gross margins by geographic region is presented below: |
|||||||||
Americas cash gross margins |
73% |
73% |
74% |
||||||
EMEA cash gross margins |
62% |
65% |
64% |
||||||
Asia-Pacific cash gross margins |
65% |
63% |
66% |
||||||
(10) |
We define adjusted EBITDA margins as adjusted EBITDA divided by revenues. |
||||||||
Americas adjusted EBITDA margins |
46% |
46% |
47% |
||||||
EMEA adjusted EBITDA margins |
42% |
45% |
46% |
||||||
Asia-Pacific adjusted EBITDA margins |
49% |
46% |
50% |
||||||
(11) |
We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows: |
||||||||
Adjusted EBITDA - current period |
$ 380,650 |
$ 333,145 |
$ 305,748 |
||||||
Less adjusted EBITDA - prior period |
(333,145) |
(321,472) |
(294,365) |
||||||
Adjusted EBITDA growth |
$ 47,505 |
$ 11,673 |
$ 11,383 |
||||||
Revenues - current period |
$ 844,156 |
$ 730,462 |
$ 643,174 |
||||||
Less revenues - prior period |
(730,462) |
(686,649) |
(638,121) |
||||||
Revenue growth |
$ 113,694 |
$ 43,813 |
$ 5,053 |
||||||
Adjusted EBITDA flow-through rate |
42% |
27% |
225% |
||||||
(12) |
FFO is defined as net income (loss), excluding gains (losses) from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items. |
||||||||
Net income (loss) |
$ (31,111) |
$ 10,731 |
$ 76,452 |
||||||
Adjustments: |
|||||||||
Real estate depreciation and amortization |
150,995 |
120,144 |
102,648 |
||||||
Gain/loss on disposition of real estate property |
(4,037) |
579 |
62 |
||||||
Adjustments for FFO from unconsolidated joint ventures |
28 |
29 |
28 |
||||||
FFO |
$ 115,875 |
$ 131,483 |
$ 179,190 |
||||||
(13) |
AFFO is defined as FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, acquisition costs, an installation revenue adjustment, a straight-line rent expense adjustment, amortization of deferred financing costs, gains (losses) on debt extinguishment, an income tax expense adjustment, net income from discontined operations, net of tax, recurring capital expenditures and adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items. |
||||||||
FFO |
$ 115,875 |
$ 131,483 |
$ 179,190 |
||||||
Adjustments: |
|||||||||
Installation revenue adjustment |
3,354 |
5,843 |
8,654 |
||||||
Straight-line rent expense adjustment |
1,133 |
1,462 |
3,201 |
||||||
Amortization of deferred financing costs |
5,508 |
4,495 |
3,858 |
||||||
Stock-based compensation expense |
34,515 |
35,058 |
30,613 |
||||||
Non-real estate depreciation expense |
21,387 |
15,921 |
12,693 |
||||||
Amortization expense |
28,152 |
8,100 |
6,295 |
||||||
Accretion expense |
1,619 |
696 |
894 |
||||||
Recurring capital expenditures |
(31,815) |
(44,668) |
(22,373) |
||||||
Loss on debt extinguishment |
- |
289 |
- |
||||||
Acquisition costs |
36,536 |
17,349 |
1,156 |
||||||
Income tax expense adjustment |
(190) |
2,279 |
(2,408) |
||||||
Net Income from discontinued operations, net of tax |
(6,216) |
- |
- |
||||||
Adjustments for AFFO from unconsolidated joint ventures |
(12) |
(14) |
(17) |
||||||
AFFO |
$ 209,846 |
$ 178,293 |
$ 221,756 |
||||||
(14) |
The FFO used in the computation of basic and diluted FFO per share attributable to Equinix is presented below: |
||||||||
FFO, basic |
$ 115,875 |
$ 131,483 |
$ 179,190 |
||||||
Interest on convertible debt |
3,226 |
3,442 |
3,362 |
||||||
FFO, diluted |
$ 119,101 |
$ 134,925 |
$ 182,552 |
||||||
The shares used in the computation of basic and diluted FFO per share attributable to Equinix is presented below: |
|||||||||
Shares used in computing basic net income per share and FFO per share |
68,132 |
60,393 |
56,661 |
||||||
Effect of dilutive securities: |
|||||||||
Convertible debt |
1,969 |
2,041 |
1,942 |
||||||
Employee equity awards |
585 |
612 |
566 |
||||||
Shares used in computing diluted FFO per share |
70,686 |
63,046 |
59,169 |
||||||
(15) |
The AFFO used in the computation of basic and diluted AFFO per share attributable to Equinix is presented below: |
||||||||
AFFO, basic |
$ 209,846 |
$ 178,293 |
$ 221,756 |
||||||
Interest on convertible debt |
1,062 |
1,557 |
1,554 |
||||||
AFFO, diluted |
$ 210,908 |
$ 179,850 |
$ 223,310 |
||||||
The shares used in the computation of basic and diluted AFFO per share attributable to Equinix is presented below: |
|||||||||
Shares used in computing basic net income per share and AFFO per share |
68,132 |
60,393 |
56,661 |
||||||
Effect of dilutive securities: |
|||||||||
Convertible debt |
1,969 |
2,041 |
1,942 |
||||||
Employee equity awards |
585 |
612 |
566 |
||||||
Shares used in computing diluted AFFO per share |
70,686 |
63,046 |
59,169 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/equinix-reports-first-quarter-2016-results-300262916.html
SOURCE
Equinix Investor Relations Contacts: Katrina Rymill, Equinix, Inc., (650) 598-6583, krymill@equinix.com, OR Paul Thomas, Equinix, Inc., (650) 598-6442, pthomas@equinix.com, OR Equinix Media Contact: Michelle Lindeman, Equinix, Inc., (650) 598-6361, mlindeman@equinix.com