PR Newswire | Nov 3, 2021 04:06PM EDT

11/03 15:05 CDT

Equinix Reports Third Quarter 2021 ResultsAs the Digitization of Business Models Accelerates, Equinix Delivers Another Consecutive Quarter of Revenue Growth REDWOOD CITY, Calif., Nov. 3, 2021

REDWOOD CITY, Calif., Nov. 3, 2021 /PRNewswire/ --

* Quarterly revenues increased 10% over the same quarter last year to $1.675 billion, or 8% on a normalized and constant currency basis, representing the company's 75th consecutive quarter of revenue growth * Record channel bookings accounted for more than 35% of total bookings, nearly 50% of enterprise bookings, and more than 60% of new logos in Q3 * Interconnection revenues continued to outpace colocation revenues in Q3 with total interconnections increasing to more than 414,000 * Significant milestones in the quarter included closing the GPX India acquisition to enter the strategic market of India and expanding the xScaleTM program with a new agreement to form a $575 million joint venture in Australia

Equinix, Inc. (Nasdaq: EQIX), the world's digital infrastructure companyTM, today reported results for the quarter ended September 30, 2021. Equinix uses certain non-GAAP financial measures, which are described further below and reconciled to the most comparable GAAP financial measures after the presentation of our GAAP financial statements. All per share results are presented on a fully diluted basis.

Third Quarter 2021 Results Summary

* Revenues * $1.675 billion, a 1% increase over the previous quarter * Includes a $6 million negative foreign currency impact when compared to prior guidance rates

* Operating Income * $282 million, a 1% increase over the previous quarter and an operating margin of 17%

* Adjusted EBITDA * $786 million, a 47% adjusted EBITDA margin * Includes a $3 million negative foreign currency impact when compared to prior guidance rates * Includes $3 million of integration costs

* Net Income and Net Income per Share attributable to Equinix * $152 million, a 123% increase over the previous quarter, primarily due to lower debt redemption costs and operating performance * $1.68 per share, a 121% increase over the previous quarter

* AFFO and AFFO per Share * $628 million, a 1% decrease from the previous quarter, including a $13 million increase in tax expense attributable to lower debt redemption costs * $6.94 per share, a 1% decrease from the previous quarter * Includes $3 million of integration costs

2021 Annual Guidance Summary

* Revenues * $6.614 - $6.634 billion, an increase of 10 - 11% over the previous year, or a normalized and constant currency increase of ~8% * Includes an incremental $5 million from the GPX India acquisition, offset by a $20 million negative foreign currency impact when compared to prior guidance rates

* Adjusted EBITDA * $3.119 - $3.139 billion, a 47% adjusted EBITDA margin * Increases prior guidance by $10 million for GPX India and lower integration costs, offset by a $9 million negative foreign currency impact when compared to prior guidance rates * Assumes $18 million of integration costs

* AFFO and AFFO per Share * $2.444 - $2.464 billion, an increase of 12 - 13% over the previous year, or a normalized and constant currency increase of 10 - 11% * Increases prior guidance by a net $3 million for GPX India and lower integration costs, offset by slightly higher taxes and a $3 million negative foreign currency impact when compared to prior guidance rates * $27.03 - $27.25 per share, an increase of 9 - 10% over the previous year on both an as-reported and a normalized and constant currency basis * Assumes $18 million of integration costs

Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income (loss) from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data without unreasonable effort. The impact of such adjustments could be significant.

Equinix Quote

Charles Meyers, President and CEO, Equinix:

"The pandemic has triggered an accelerated need to digitize business models in virtually every segment of the economy, and our strong Q3 results are reflective of this increasing demand for digital services. As the world's digital infrastructure company, Equinix remains uniquely positioned to help businesses as they shift towards distributed, hybrid and multicloud as the clear architecture of choice."

Business Highlights

* Equinix continued to extend its global platform both organically and through acquisitions, enhancing cloud and network density to offer enterprises the most robust platform for their digital infrastructure: * In September, Equinix completed the GPX India acquisition, providing an entry into the strategic market of India and bringing the global footprint of Platform Equinix(r) to 27 countries, 65 metros and more than 235 data centers. * 11 major data center openings and expansions were delivered in Q3, including the key markets of Frankfurt, New York and Singapore. * 31 additional major projects are underway across 23 markets in 16 countries.

* The xScaleTM program continued to expand in Q3, supporting the unique needs of hyperscale companies and the increasing demand for hybrid multicloud architecture: * In October, Equinix announced an agreement to form a new $575 million joint venture with PGIM Real Estate to extend its xScale data center program into Australia. * The total investment in the xScale program, when closed and fully built out, is expected to be more than $7.5 billion across 34 facilities globally with more than 675 megawatts of power capacity. * Eight xScale builds are currently under development, including newly announced projects in Madrid, Mexico City and Sydney.

* Equinix continued the growth of its indirect selling initiatives, with channel sales contributing more than 35% of the bookings for the quarter, nearly half of enterprise bookings, and more than 60% of new logos in the quarter. Wins were across a wide range of industry verticals and use cases, with continued strength from strategic partners.

COVID-19 Update

Many of Equinix's International Business ExchangeTM (IBX(r)) and xScale data centers have been identified as "essential businesses" or "critical infrastructure" by local governments for purposes of remaining open during the ongoing COVID-19 pandemic, and all data centers remain operational at the time of filing of this press release. Precautionary measures have been implemented during the COVID-19 pandemic to minimize the risk of operational impact and to protect the health and safety of employees, customers, partners and communities.

Looking ahead, the full impact of the COVID-19 pandemic on the company's financial condition or results of operations remains uncertain and will depend on a number of factors, including its impact on Equinix customers, partners and vendors and the impact on, and functioning of, the global financial markets. The company's past results may not be indicative of future performance, and historical trends may differ materially. Additional information pertaining to the impact of the COVID-19 pandemic on Equinix and the company's response thereto will be provided in the upcoming Form 10-Q to be filed with the Securities and Exchange Commission for the quarter ended September 30, 2021.

Business Outlook

For the fourth quarter of 2021, the Company expects revenues to range between $1.685 and $1.705 billion, an increase of 1 - 2% compared to the prior quarter on both an as-reported and a normalized and constant currency basis. This guidance includes a $5 million negative foreign currency impact when compared to the average FX rates in Q3 2021. This guidance includes the largest ever normalized step-up in recurring revenues in Q4, a reflection of continued strong execution, and a sequential decrease of non-recurring revenues by approximately $12 million. Adjusted EBITDA is expected to range between $762 and $782 million. Adjusted EBITDA includes a $2 million negative foreign currency impact when compared to the average FX rates in Q3 2021 and $7 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $75 and $85 million.

For the full year of 2021, total revenues are expected to range between $6.614 and $6.634 billion, a 10 - 11% increase over the previous year, or a normalized and constant currency increase of approximately 8%. This updated full year guidance includes an incremental $5 million from the GPX India acquisition, offset by a negative foreign currency impact of $20 million when compared to the prior guidance rates. Adjusted EBITDA is expected to range between $3.119 and $3.139 billion, an adjusted EBITDA margin of 47%. This updated full year guidance includes a $7 million reduction of integration costs and an incremental $3 million from the GPX India acquisition, offset by a negative foreign currency impact of $9 million when compared to the prior guidance rates. AFFO is expected to range between $2.444 and $2.464 billion, an increase of 12 - 13% over the previous year, or a normalized and constant currency increase of 10 - 11%. This updated guidance includes a net $3 million increase due to the GPX India acquisition and lower integration costs, offset by slightly higher taxes and a $3 million negative foreign currency impact when compared to the prior guidance rates. AFFO per share is expected to range between $27.03 and $27.25, an increase of 9 - 10% over the previous year, both as-reported and on a normalized and constant currency basis. Total capital expenditures are expected to range between $2.738 and $2.988 billion. Non-recurring capital expenditures, including xScale-related costs, are expected to range between $2.550 and $2.790 billion, and recurring capital expenditures are expected to range between $188 and $198 million. xScale-related on-balance sheet capital expenditures are expected to range between $425 and $475 million, which we anticipate will be reimbursed from both the current and future xScale JVs.

The U.S. dollar exchange rates used for 2021 guidance, taking into consideration the impact of our current foreign currency hedges, have been updated to $1.16 to the Euro, $1.32 to the Pound, S$1.36 to the U.S. dollar, 111 to the U.S. dollar, and R$5.47 to the U.S. dollar. The Q3 2021 global revenue breakdown by currency for the Euro, British Pound, Singapore Dollar, Japanese Yen and Brazilian Real is 20%, 9%, 7%, 7% and 3%, respectively.

The adjusted EBITDA guidance is based on the revenue guidance less our expectations of cash cost of revenues and cash operating expenses. The AFFO guidance is based on the adjusted EBITDA guidance less our expectations of net interest expense, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, income tax expense, an income tax expense adjustment, recurring capital expenditures, other income (expense), (gains) losses on disposition of real estate property, and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items.

Q3 2021 Results Conference Call and Replay Information

Equinix will discuss its quarterly results for the period ended September 30, 2021, along with its future outlook, in its quarterly conference call on Wednesday, November 3, 2021, at 5:30 p.m. ET (2:30 p.m. PT). A simultaneous live webcast of the call will be available on the company's Investor Relations website at www.equinix.com/investors. To hear the conference call live, please dial 1-517-308-9482 (domestic and international) and reference the passcode EQIX.

A replay of the call will be available one hour after the call through Wednesday, February 16, 2022, by dialing 1-866-373-9229 and referencing the passcode 2021. In addition, the webcast will be available at www.equinix.com/investors (no password required).

Investor Presentation and Supplemental Financial Information

Equinix has made available on its website a presentation designed to accompany the discussion of Equinix's results and future outlook, along with certain supplemental financial information and other data. Interested parties may access this information through the Equinix Investor Relations website at www.equinix.com/investors.

Additional Resources

* Equinix Investor Relations Resources

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company, enabling digital leaders to harness a trusted platform to bring together and interconnect the foundational infrastructure that powers their success. Equinix enables today's businesses to access all the right places, partners and possibilities they need to accelerate advantage. With Equinix, they can scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value.

Non-GAAP Financial Measures

Equinix 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, Equinix uses non-GAAP financial measures to evaluate its operations.

Equinix provides normalized and constant currency growth rates, which are calculated to adjust for acquisitions, dispositions, integration costs, changes in accounting principles and foreign currency.

Equinix presents adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA represents income from operations excluding depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales.

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, Equinix excludes certain items that it believes are not good indicators of Equinix'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, transaction costs and gain or loss on asset sales. Equinix excludes these items in order for its lenders, investors and the industry analysts who review and report on Equinix to better evaluate Equinix's operating performance and cash spending levels relative to its industry sector and competitors.

Equinix excludes depreciation expense as these charges primarily relate to the initial construction costs of a data center, and do not reflect its current or future cash spending levels to support its business. Its data centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of a data center do not recur with respect to such data center, although Equinix may incur initial construction costs in future periods with respect to additional data 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 data centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our data centers and are not indicative of current or expected future capital expenditures. Therefore, Equinix excludes depreciation from its operating results when evaluating its operations.

In addition, in presenting the non-GAAP financial measures, Equinix also excludes amortization expense related to acquired intangible assets. Amortization expense is significantly affected by the timing and magnitude of acquisitions and these charges may vary in amount from period to period. We exclude amortization expense to facilitate a more meaningful evaluation of our current operating performance and comparisons to our prior periods. Equinix 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 Equinix also believes are not meaningful in evaluating Equinix's current operations. Equinix excludes stock-based compensation expense, as it can vary significantly from period to period based on share price and the timing, size and nature of equity awards. As such, Equinix and many investors and analysts exclude stock-based compensation expense to compare its operating results with those of other companies. Equinix excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to Equinix's decision to exit leases for excess space adjacent to several of its IBX data centers, which it did not intend to build out, or its decision to reverse such restructuring charges. Equinix also excludes impairment charges generally 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 assets are not recoverable. Equinix also excludes gain or loss on asset sales as it represents profit or loss that is not meaningful in evaluating the current or future operating performance. Finally, Equinix excludes transaction costs from its non-GAAP financial measures to allow more comparable comparisons of the financial results to the historical operations. The transaction costs relate to costs Equinix incurs in connection with business combinations and formation of joint ventures, including advisory, legal, accounting, valuation and other professional or consulting fees. Such charges generally are not relevant to assessing the long-term performance of Equinix. In addition, the frequency and amount of such charges vary significantly based on the size and timing of the transactions. Management believes items such as restructuring charges, impairment charges, transaction costs and gain or loss on asset sales are non-core transactions; however, these types of costs may occur in future periods.

Equinix also presents funds from operations ("FFO") and adjusted funds from operations ("AFFO"), both commonly used in the REIT industry, as supplemental performance measures. Additionally, Equinix presents AFFO per share, which is also commonly used in the REIT industry. AFFO per share offers investors and industry analysts a perspective of Equinix's underlying operating performance when compared to other REIT companies. FFO is calculated in accordance with the definition established by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO represents net income or loss, excluding gain or loss 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. AFFO represents FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain or loss on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income or loss from discontinued operations, net of tax and adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling interests' share of these items. Equinix excludes depreciation expense, amortization expense, accretion, stock-based compensation, restructuring charges, impairment charges and transaction costs for the same reasons that they are excluded from the other non-GAAP financial measures mentioned above.

Equinix includes an adjustment for revenues from installation fees, since installation fees are deferred and recognized ratably over the period of contract term, although the fees are generally paid in a lump sum upon installation. Equinix 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. Equinix also includes an adjustment to contract costs incurred to obtain contracts, since contract costs are capitalized and amortized over the estimated period of benefit on a straight-line basis, although costs of obtaining contracts are generally incurred and paid during the period of obtaining the contracts. The adjustments for installation revenues, straight-line rent expense and contract costs are intended to isolate the cash activity included within the straight-lined or amortized results in the consolidated statement of operations. Equinix excludes the amortization of deferred financing costs and debt discounts and premiums as these expenses relate to the initial costs incurred in connection with its debt financings that have no current or future cash obligations. Equinix excludes gain or loss on debt extinguishment since it represents a cost that is not a good indicator of Equinix's current or future operating performance. Equinix includes an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances and uncertain tax positions that do not relate to the current period's operations. Equinix excludes recurring capital expenditures, which represent expenditures to extend the useful life of its IBX and xScale data centers or other assets that are required to support current revenues. Equinix also excludes net income or loss from discontinued operations, net of tax, which represents results that are not a good indicator of our current or future operating performance.

Equinix presents constant currency results of operations, which is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, Equinix has presented this non-GAAP financial measure to provide investors with an additional tool to evaluate its operating results without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Equinix's business performance. To present this information, Equinix's current and comparative prior period revenues and certain operating expenses from entities with functional currencies other than the U.S. dollar are converted into U.S. dollars at a consistent exchange rate for purposes of each result being compared.

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 GAAP financial measures. Equinix presents such non-GAAP financial measures to provide investors with an additional tool to evaluate its 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. Equinix believes that if it did not provide such non-GAAP financial information, investors would not have all the necessary data to analyze Equinix effectively.

Investors should note that the non-GAAP financial measures used by Equinix 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. Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income or loss from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data without unreasonable effort. The impact of such adjustments could be significant. Equinix intends to calculate the various non-GAAP financial measures in future periods consistent with how they were calculated for the periods presented within this press release.

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, risks to our business and operating results related to the ongoing COVID-19 pandemic; the challenges of acquiring, operating and constructing IBX and xScale data centers and developing, deploying and delivering Equinix products and solutions; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenues from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; risks related to our taxation as a REIT and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent and upcoming Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.



EQUINIX, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)



Three Months Ended Nine Months Ended

September June 30, September September September 30, 2021 2021 30, 2020 30, 2021 30, 2020

Recurring $1,563,616$1,542,462$1,432,072$4,617,011$4,191,904revenues

Non-recurring 111,560 115,457 87,695 312,148 242,526 revenues

Revenues 1,675,176 1,657,919 1,519,767 4,929,159 4,434,430

Cost of 885,650 865,120 767,979 2,561,987 2,243,605 revenues

Gross profit 789,526 792,799 751,788 2,367,172 2,190,825

Operating expenses:

Sales and 182,997 185,610 172,727 551,434 531,301 marketing

General and 334,625 322,005 279,350 958,086 797,837 administrative

Transaction 5,197 6,985 5,840 13,364 30,987 costs

Impairment - - 7,306 - 7,306 charges

Gain on asset (15,414) (455) (1,785) (14,149) (928) sales

Total operating507,405 514,145 463,438 1,508,735 1,366,503 expenses

Income from 282,121 278,654 288,350 858,437 824,322 operations

Interest and other income (expense):

Interest income411 374 1,452 1,514 7,410

Interest (78,943) (87,231) (99,736) (255,855) (315,554) expense

Other income 1,482 (39,377) 162 (44,845) 9,610 (expense)

Gain (loss) on debt 179 (102,460) (93,494) (115,339) (101,803) extinguishment

Total interest (76,871) (228,694) (191,616) (414,525) (400,337) and other, net

Income before 205,250 49,960 96,734 443,912 423,985 income taxes

Income tax (expense) (53,224) 18,527 (29,903) (67,325) (104,847) benefit

Net income 152,026 68,487 66,831 376,587 319,138

Net (income) loss attributable to190 (148) (144) 330 (355) non-controlling interests

Net income attributable to$152,216 $68,339 $66,687 $376,917 $318,783 Equinix

Net income per share attributable to Equinix:

Basic net income per $1.69 $0.76 $0.75 $4.21 $3.65 share

Diluted net income per $1.68 $0.76 $0.74 $4.18 $3.63 share

Shares used in computing basic89,858 89,648 88,806 89,614 87,226 net income per share

Shares used in computing diluted net 90,467 90,104 89,519 90,202 87,925 income per share







EQUINIX, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)



Three Months Ended Nine Months Ended

September June 30, September September September 30, 2021 2021 30, 2020 30, 2021 30, 2020

Net income $152,026$68,487 $66,831 $376,587$319,138

Other comprehensive income (loss), net of tax:

Foreign currency translation (260,011)110,466 299,441 (444,691)66,935 adjustment ("CTA") gain (loss)

Net investment hedge CTA gain 131,080 (37,036) (227,101)264,219 (179,213)(loss)

Unrealized gain (loss) on cash 28,270 (5,700) (33,842) 52,048 (54,966) flow hedges

Net actuarial gain on defined benefit14 15 22 41 77 plans

Total other comprehensive (100,647)67,745 38,520 (128,383)(167,167)income (loss), net of tax

Comprehensive 51,379 136,232 105,351 248,204 151,971 income, net of tax

Net (income) loss attributable to 190 (148) (144) 330 (355) non-controlling interests

Other comprehensive (income) - (11) (30) (10) (21) attributable to non-controlling interests

Comprehensive income $51,569 $136,073$105,177$248,524$151,595attributable to Equinix







EQUINIX, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)



September 30, 2021December 31, 2020

Assets

Cash and cash equivalents $1,379,100 $1,604,869

Short-term investments - 4,532

Accounts receivable, net 792,101 676,738

Other current assets 492,832 323,016

Assets held for sale 235,330 -

Total current assets 2,899,363 2,609,155

Property, plant and equipment, net 15,307,049 14,503,084

Operating lease right-of-use assets 1,325,872 1,475,057

Goodwill 5,401,744 5,472,553

Intangible assets, net 1,994,023 2,170,945

Other assets 846,080 776,047

Total assets $27,774,131 $27,006,841

Liabilities and Stockholders' Equity

Accounts payable and accrued expenses $844,056 $844,862

Accrued property, plant and equipment 347,003 301,155

Current portion of operating lease 150,490 154,207 liabilities

Current portion of finance lease 148,522 137,683 liabilities

Current portion of mortgage and loans 67,571 82,289 payable

Current portion of senior notes - 150,186

Other current liabilities 223,494 354,368

Total current liabilities 1,781,136 2,024,750

Operating lease liabilities, less 1,147,490 1,308,627 current portion

Finance lease liabilities, less current1,986,266 1,784,816 portion

Mortgage and loans payable, less 560,733 1,287,254 current portion

Senior notes, less current portion 11,000,669 9,018,277

Other liabilities 729,264 948,999

Total liabilities 17,205,558 16,372,723

Common stock 90 89

Additional paid-in capital 15,488,848 15,028,357

Treasury stock (112,696) (122,118)

Accumulated dividends (5,902,937) (5,119,274)

Accumulated other comprehensive loss (1,041,761) (913,368)

Retained earnings 2,137,219 1,760,302

Total Equinix stockholders' 10,568,763 10,633,988 equity

Non-controlling interests (190) 130

Total stockholders' equity 10,568,573 10,634,118

Total liabilities and $27,774,131 $27,006,841 stockholders' equity



Ending headcount by geographic region is as follows:

Americas headcount 4,971 4,599

EMEA headcount 3,588 3,405

Asia-Pacific headcount 2,242 2,009

Total headcount 10,801 10,013







EQUINIX, INC.

Summary of Debt Principal Outstanding

(in thousands)

(unaudited)



September 30, 2021December 31, 2020



Finance lease liabilities $2,134,788 $1,922,499



Term loans 555,268 1,288,779

Mortgage payable and other loans 73,036 80,764 payable

Plus (minus): mortgage premium, debt (1,226) 1,427 discount and issuance costs, net

Total mortgage and loans 627,078 1,370,970 payable principal



Senior notes 11,000,669 9,168,463

Plus: debt discount and issuance costs 122,031 92,773

Less: debt premium - (186)

Total senior notes principal 11,122,700 9,261,050



Total debt principal outstanding $13,884,566 $12,554,519







EQUINIX, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



Three Months Ended Nine Months Ended

September June 30, September September September 30, 2021 2021 30, 2020 30, 2021 30, 2020



Cash flows from operating activities:

Net income $152,026 $68,487 $66,831 $376,587 $319,138

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization 419,684 417,758 362,286 1,231,760 1,048,151 and accretion

Stock-based 94,710 94,335 75,248 267,395 215,591 compensation

Amortization of debt issuance costs4,390 4,430 3,884 12,760 11,788 and debt discounts and premiums

(Gain) loss on debt (179) 102,460 93,494 115,339 101,803 extinguishment

Gain on asset (15,414) (455) (1,785) (14,149) (928) sales

Impairment - - 7,306 - 7,306 charges

Other items 5,932 11,296 (2,518) 28,410 18,229

Changes in operating assets and liabilities:

Accounts (53,984) (39,709) (23,871) (111,313) (38,104) receivable

Income taxes, 21,735 (55,661) (32,054) (44,200) (20,193) net

Accounts payable and 67,169 19,161 61,410 9,968 35,846 accrued expenses

Operating lease 40,953 20,851 38,319 102,728 114,611 right-of-use assets

Operating lease (37,423) (63,765) (35,300) (137,751) (107,391) liabilities

Other assets and (34,853) 20,009 (81,088) (182,433) (82,169) liabilities

Net cash provided by operating 664,746 599,197 532,162 1,655,101 1,623,678 activities

Cash flows from investing activities:

Purchases, sales and maturities of (52,138) (2,595) 3,969 (73,082) (36,312) investments, net

Business acquisitions, net of cash (158,498) - - (158,498) (478,248) and restricted cash acquired

Real estate (107,212) (33,900) (41,895) (194,849) (124,462) acquisitions

Purchases of other property, (678,277) (692,232) (565,285) (1,934,107)(1,448,174) plant and equipment

Proceeds from 174,494 - - 174,494 - asset sales

Net cash used in investing (821,631) (728,727) (603,211) (2,186,042)(2,087,196)activities

Cash flows from financing activities:

Proceeds from employee 37,594 - 31,727 77,628 62,118 equity awards

Payment of dividend (262,362) (258,053) (240,690) (783,454) (710,177) distributions

Proceeds from public offering of - 99,599 196,477 99,599 1,981,375 common stock, net of offering costs

Proceeds from mortgage and - - - - 750,790 loans payable

Proceeds from senior notes, - 2,587,910 - 3,878,662 2,585,736 net of debt discounts

Repayment of finance lease (31,252) (66,293) (31,765) (130,129) (74,446) liabilities

Repayment of mortgage and (10,367) (675,873) (19,431) (706,426) (808,609) loans payable

Repayment of - (1,400,000)(1,947,050)(1,990,650)(2,440,761) senior notes

Debt extinguishment- (90,664) (77,785) (99,185) (82,404) costs

Debt issuance - (21,950) - (25,102) (26,266) costs

Net cash provided by (used in) (266,387) 174,676 (2,088,517)320,943 1,237,356 financing activities

Effect of foreign currency exchange rates on cash, (7,085) 4,965 18,513 (24,139) 5,637 cash equivalents and restricted cash

Net increase (decrease) in cash, cash (430,357) 50,111 (2,141,053)(234,137) 779,475 equivalents and restricted cash

Cash, cash equivalents and restricted cash at1,821,915 1,771,804 4,807,141 1,625,695 1,886,613 beginning of period

Cash, cash equivalents and $1,391,558$1,821,915$2,666,088$1,391,558$2,666,088restricted cash at end of period

Supplemental cash flow information:

Cash paid for $35,755 $32,667 $55,473 $118,392 $116,549 taxes

Cash paid for $86,466 $128,636 $115,174 $316,157 $363,767 interest



Negative free cash$(104,747)$(126,935)$(75,018) $(457,859)$(427,206)flow ^(1)



Adjusted free cash flow (negative $160,963 $(93,035) $(33,123) $(104,512)$175,504 adjusted free cash flow) ^(2)



We define free cash flow (negative free cash flow) as net cash provided by (1)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 $664,746 $599,197 $532,162 $1,655,101$1,623,678 activities as presented above

Net cash used in investing activities as (821,631) (728,727) (603,211) (2,186,042)(2,087,196) presented above

Purchases, sales and maturities of 52,138 2,595 (3,969) 73,082 36,312 investments, net

Negative free $(104,747)$(126,935)$(75,018) $(457,859)$(427,206) cash flow



We define adjusted free cash flow (negative adjusted free cash flow) as free (2)cash flow (negative free cash flow) as defined above, excluding any real estate and business acquisitions, net of cash and restricted cash acquired as presented below:

Negative free cash flow as $(104,747)$(126,935)$(75,018) $(457,859)$(427,206) defined above

Less business acquisitions, net of cash 158,498 - - 158,498 478,248 and restricted cash acquired

Less real estate 107,212 33,900 41,895 194,849 124,462 acquisitions

Adjusted free cash flow (negative $160,963 $(93,035) $(33,123) $(104,512)$175,504 adjusted free cash flow)







EQUINIX, INC.

Non-GAAP Measures and Other Supplemental Data

(in thousands)

(unaudited)



Three Months Ended Nine Months Ended

September 30,June 30, 2021September 30,September 30,September 30, 2021 2020 2021 2020

Recurring $1,563,616 $ 1,542,462$ 1,432,072$ 4,617,011$ 4,191,904 revenues

Non-recurring 111,560 115,457 87,695 312,148 242,526 revenues

Revenues ^(1) 1,675,176 1,657,919 1,519,767 4,929,159 4,434,430



Cash cost of 564,499 544,196 494,187 1,619,505 1,451,674 revenues ^(2)

Cash gross 1,110,677 1,113,723 1,025,580 3,309,654 2,982,756 profit ^(3)



Cash operating expenses ^(4) (7):

Cash sales and marketing 114,112 115,282 106,317 342,447 332,995 expenses ^(5)

Cash general and 210,267 201,164 182,018 610,400 508,265 administrative expenses ^(6)

Total cash operating 324,379 316,446 288,335 952,847 841,260 expenses ^(4) (7)



Adjusted EBITDA$786,298 $ 797,277 $ 737,245 $ 2,356,807$ 2,141,496 ^(8)



Cash gross 66 % 67 % 67 % 67 % 67 % margins ^(9)



Adjusted EBITDA47 % 48 % 49 % 48 % 48 % margins^(10)



Adjusted EBITDA flow-through (64) % 39 % 35 % 50 % 48 % rate ^(11)



FFO ^(12) $407,981 $ 340,873 $ 298,183 $ 1,166,117$ 998,883



AFFO ^(13)(14) $628,270 $ 631,937 $ 579,682 $ 1,887,035$ 1,672,180



Basic FFO per $4.54 $ 3.80 $ 3.36 $ 13.01 $ 11.45 share ^(15)



Diluted FFO per$4.51 $ 3.78 $ 3.33 $ 12.93 $ 11.36 share ^(15)



Basic AFFO per $6.99 $ 7.05 $ 6.53 $ 21.06 $ 19.17 share ^(15)



Diluted AFFO $6.94 $ 7.01 $ 6.48 $ 20.92 $ 19.02 per share ^(15)













(1) The geographic split of our revenues on a services basis is presented below:



Americas Revenues:



Colocation $504,711 $ 497,659 $ 450,030 $ 1,489,829$ 1,348,482

Interconnection168,511 167,618 156,677 501,016 460,993

Managed 43,313 40,734 28,954 122,532 83,372 infrastructure

Other 4,757 451 3,911 7,246 14,212

Recurring 721,292 706,462 639,572 2,120,623 1,907,059 revenues

Non-recurring 41,761 44,181 32,760 119,013 88,597 revenues

Revenues $763,053 $ 750,643 $ 672,332 $ 2,239,636$ 1,995,656



EMEA Revenues:



Colocation $400,395 $ 398,703 $ 391,773 $ 1,187,373$ 1,135,247

Interconnection65,809 65,258 55,700 192,717 155,145

Managed 31,445 31,176 30,690 94,732 89,839 infrastructure

Other 5,639 3,682 5,581 14,367 14,177

Recurring 503,288 498,819 483,744 1,489,189 1,394,408 revenues

Non-recurring 41,939 39,110 34,339 112,684 90,674 revenues

Revenues $545,227 $ 537,929 $ 518,083 $ 1,601,873$ 1,485,082



Asia-Pacific Revenues:



Colocation $259,092 $ 259,573 $ 236,762 $ 773,223 $ 686,658

Interconnection56,789 54,898 48,565 164,869 136,376

Managed 21,572 22,094 22,614 66,415 66,588 infrastructure

Other 1,583 616 815 2,692 815

Recurring 339,036 337,181 308,756 1,007,199 890,437 revenues

Non-recurring 27,860 32,166 20,596 80,451 63,255 revenues

Revenues $366,896 $ 369,347 $ 329,352 $ 1,087,650$ 953,692



Worldwide Revenues:



Colocation $1,164,198 $ 1,155,935$ 1,078,565$ 3,450,425$ 3,170,387

Interconnection291,109 287,774 260,942 858,602 752,514

Managed 96,330 94,004 82,258 283,679 239,799 infrastructure

Other 11,979 4,749 10,307 24,305 29,204

Recurring 1,563,616 1,542,462 1,432,072 4,617,011 4,191,904 revenues

Non-recurring 111,560 115,457 87,695 312,148 242,526 revenues

Revenues $1,675,176 $ 1,657,919$ 1,519,767$ 4,929,159$ 4,434,430







(2) We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compensation as presented below:



Cost of $885,650 $ 865,120 $ 767,979 $ 2,561,987$ 2,243,605 revenues

Depreciation, amortization (311,438) (310,916) (265,936) (914,294) (767,077) and accretion expense

Stock-based compensation (9,713) (10,008) (7,856) (28,188) (24,854) expense

Cash cost of $564,499 $ 544,196 $ 494,187 $ 1,619,505$ 1,451,674 revenues



The geographic split of our cash cost of revenues is presented below:



Americas cash cost of $239,172 $ 234,679 $ 196,731 $ 667,311 $ 576,431 revenues

EMEA cash cost 204,174 196,661 189,423 600,018 554,229 of revenues

Asia-Pacific cash cost of 121,153 112,856 108,033 352,176 321,014 revenues

Cash cost of $564,499 $ 544,196 $ 494,187 $ 1,619,505$ 1,451,674 revenues



(3) We define cash gross profit as revenues less cash cost of revenues (as defined above).



We define cash operating expense as selling, general, and administrative (4) expense less depreciation, amortization, and stock-based compensation. We also refer to cash operating expense as cash selling, general and administrative expense or "cash SG&A".



Selling, general, and $517,622 $ 507,615 $ 452,077 $ 1,509,520$ 1,329,138 administrative expense

Depreciation and (108,246) (106,842) (96,350) (317,466) (281,074) amortization expense

Stock-based compensation (84,997) (84,327) (67,392) (239,207) (206,804) expense

Cash operating $324,379 $ 316,446 $ 288,335 $ 952,847 $ 841,260 expense



(5) We define cash sales and marketing expense as sales and marketing expense less depreciation, amortization and stock-based compensation as presented below:



Sales and marketing $182,997 $ 185,610 $ 172,727 $ 551,434 $ 531,301 expense

Depreciation and (48,320) (49,549) (48,780) (149,940) (143,916) amortization expense

Stock-based compensation (20,565) (20,779) (17,630) (59,047) (54,390) expense

Cash sales and marketing $114,112 $ 115,282 $ 106,317 $ 342,447 $ 332,995 expense



We define cash general and administrative expense as general and administrative (6) expense less depreciation, amortization and stock-based compensation as presented below:



General and administrative $334,625 $ 322,005 $ 279,350 $ 958,086 $ 797,837 expense

Depreciation and (59,926) (57,293) (47,570) (167,526) (137,158) amortization expense

Stock-based compensation (64,432) (63,548) (49,762) (180,160) (152,414) expense

Cash general and $210,267 $ 201,164 $ 182,018 $ 610,400 $ 508,265 administrative expense



(7) The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below:



Americas cash $202,113 $ 190,040 $ 185,051 $ 580,141 $ 532,955 SG&A

EMEA cash SG&A 73,500 78,742 65,444 228,213 193,882

Asia-Pacific 48,766 47,664 37,840 144,493 114,423 cash SG&A

Cash SG&A $324,379 $ 316,446 $ 288,335 $ 952,847 $ 841,260



We define adjusted EBITDA as income from operations excluding depreciation, (8) amortization, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales as presented below:



Income from $282,121 $ 278,654 $ 288,350 $ 858,437 $ 824,322 operations

Depreciation, amortization 419,684 417,758 362,286 1,231,760 1,048,151 and accretion expense

Stock-based compensation 94,710 94,335 75,248 267,395 231,658 expense

Impairment - - 7,306 - 7,306 charges

Transaction 5,197 6,985 5,840 13,364 30,987 costs

Gain on asset (15,414) (455) (1,785) (14,149) (928) sales

Adjusted EBITDA$786,298 $ 797,277 $ 737,245 $ 2,356,807$ 2,141,496



The geographic split of our adjusted EBITDA is presented below:



Americas income$26,520 $ 27,745 $ 50,657 $ 135,830 $ 156,388 from operations

Americas depreciation, amortization 219,106 222,413 182,899 644,225 536,542 and accretion expense

Americas stock-based 70,495 69,982 55,044 198,739 174,059 compensation expense

Americas transaction 4,478 6,239 3,735 10,956 20,288 costs

Americas (gain) loss on asset 1,169 (455) (1,785) 2,434 (1,007) sales

Americas $321,768 $ 325,924 $ 290,550 $ 992,184 $ 886,270 adjusted EBITDA



EMEA income $153,424 $ 131,158 $ 148,992 $ 404,367 $ 413,150 from operations

EMEA depreciation, amortization 115,026 115,702 101,265 341,941 286,958 and accretion expense

EMEA stock-based 15,022 15,114 12,770 42,266 36,012 compensation expense

EMEA transaction 664 552 189 1,651 772 costs

EMEA (gain) loss on asset (16,583) - - (16,583) 79 sales

EMEA adjusted $267,553 $ 262,526 $ 263,216 $ 773,642 $ 736,971 EBITDA



Asia-Pacific income from $102,177 $ 119,751 $ 88,701 $ 318,240 $ 254,784 operations

Asia-Pacific depreciation, amortization 85,552 79,643 78,122 245,594 224,651 and accretion expense

Asia-Pacific stock-based 9,193 9,239 7,434 26,390 21,587 compensation expense

Asia-Pacific impairment - - 7,306 - 7,306 charges

Asia-Pacific transaction 55 194 1,916 757 9,927 costs

Asia-Pacific $196,977 $ 208,827 $ 183,479 $ 590,981 $ 518,255 adjusted EBITDA



(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 69 % 69 % 71 % 70 % 71 % gross margins

EMEA cash gross63 % 63 % 63 % 63 % 63 % margins

Asia-Pacific cash gross 67 % 69 % 67 % 68 % 66 % margins



(10)We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.



Americas adjusted EBITDA42 % 43 % 43 % 44 % 44 % margins

EMEA adjusted 49 % 49 % 51 % 48 % 50 % EBITDA margins

Asia-Pacific adjusted EBITDA54 % 57 % 56 % 54 % 54 % margins



(11)We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows:



Adjusted EBITDA - current $786,298 $ 797,277 $ 737,245 $ 2,356,807$ 2,141,496 period

Less adjusted EBITDA - prior (797,277) (773,232) (720,041) (2,168,688) (2,027,572) period

Adjusted EBITDA$(10,979) $ 24,045 $ 17,204 $ 188,119 $ 113,924 growth



Revenues - $1,675,176 $ 1,657,919$ 1,519,767$ 4,929,159$ 4,434,430 current period

Less revenues -(1,657,919) (1,596,064) (1,470,121) (4,554,003) (4,198,922) prior period

Revenue growth $17,257 $ 61,855 $ 49,646 $ 375,156 $ 235,508



Adjusted EBITDA flow-through (64) % 39 % 35 % 50 % 48 % rate



FFO is defined as net income or loss, excluding gain or loss from the (12)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 $152,026 $ 68,487 $ 66,831 $ 376,587 $ 319,138

Net (income) loss attributable to190 (148) (144) 330 (355) non-controlling interests

Net income attributable to152,216 68,339 66,687 376,917 318,783 Equinix

Adjustments:

Real estate 267,973 271,500 232,110 796,117 676,510 depreciation

(Gain) loss on disposition of (13,744) (518) (1,313) (11,132) 1,569 real estate property

Adjustments for FFO from 1,536 1,552 699 4,215 2,021 unconsolidated joint ventures

FFO attributable to$407,981 $ 340,873 $ 298,183 $ 1,166,117$ 998,883 common shareholders





AFFO is defined as FFO, excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost (13)adjustment, amortization of deferred financing costs and debt discounts and premiums, gain or loss on debt extinguishment, an income tax expense adjustment, net income or loss from discontinued 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 attributable to$407,981 $ 340,873 $ 298,183 $ 1,166,117$ 998,883 common shareholders

Adjustments:

Installation revenue 13,710 4,539 (3,797) 22,161 (3,629) adjustment

Straight-line rent expense 3,855 3,381 3,019 11,597 7,220 adjustment

Amortization of deferred financing costs4,390 4,447 3,884 12,760 11,788 and debt discounts and premiums

Contract cost (15,919) (13,381) (7,111) (43,311) (22,852) adjustment

Stock-based compensation 94,710 94,335 75,248 267,395 231,658 expense

Non-real estate depreciation 100,604 93,062 78,356 278,644 220,565 expense

Amortization 50,354 51,679 50,222 155,428 148,075 expense

Accretion 753 1,517 1,598 1,571 3,001 expense

Recurring capital (47,735) (45,331) (38,327) (113,396) (86,191) expenditures

(Gain) loss on debt (179) 102,460 93,494 115,339 101,803 extinguishment

Transaction 5,197 6,985 5,840 13,364 30,987 costs

Impairment (1,240) 33,552 7,306 32,312 7,306 charges ^(1)

Income tax expense 11,256 (47,440) 11,480 (35,419) 22,383 adjustment ^(1)

Adjustments for AFFO from 533 1,259 287 2,473 1,183 unconsolidated joint ventures

AFFO attributable to$628,270 $ 631,937 $ 579,682 $ 1,887,035$ 1,672,180 common shareholders



Impairment charges for 2021 relate to the impairment of an indemnification asset in Q2 2021 resulting from the settlement of a pre-acquisition uncertain tax position, which was recorded as Other ^(1) Income (Expense) on the Condensed Consolidated Statements of Operations. This impairment charge was offset by the recognition of tax benefits in the same amount, which was included within the Income tax expense adjustment line on the table above.





(14) Following is how we reconcile from adjusted EBITDA to AFFO:



Adjusted EBITDA$786,298 $ 797,277 $ 737,245 $ 2,356,807$ 2,141,496

Adjustments:

Interest expense, net of(78,532) (86,857) (98,284) (254,341) (308,144) interest income

Amortization of deferred financing costs4,390 4,447 3,884 12,760 11,788 and debt discounts and premiums

Income tax (expense) (53,224) 18,527 (29,903) (67,325) (104,847) benefit

Income tax expense 11,256 (47,440) 11,480 (35,419) 22,383 adjustment ^(1)

Straight-line rent expense 3,855 3,381 3,019 11,597 7,220 adjustment

Contract cost (15,919) (13,381) (7,111) (43,311) (22,852) adjustment

Installation revenue 13,710 4,539 (3,797) 22,161 (3,629) adjustment

Recurring capital (47,735) (45,331) (38,327) (113,396) (86,191) expenditures

Other income 1,482 (39,377) 162 (44,845) 9,610 (expense)

(Gain) loss on disposition of (13,744) (518) (1,313) (11,132) 1,569 real estate property

Adjustments for unconsolidated JVs' and 2,259 2,663 842 7,018 2,849 non-controlling interests

Adjustments for impairment (1,240) 33,552 - 32,312 - charges ^(1)

Adjustment for gain on sale of15,414 455 1,785 14,149 928 assets

AFFO attributable to$628,270 $ 631,937 $ 579,682 $ 1,887,035$ 1,672,180 common shareholders



Impairment charges for 2021 relate to the impairment of an indemnification asset in Q2 2021 resulting from the settlement of a pre-acquisition ^(1) uncertain tax position, which was recorded as Other Income (Expense) on the Condensed Consolidated Statements of Operations. This impairment charge was offset by the recognition of tax benefits in the same amount, which was included within the Income tax expense adjustment line on the table above.





(15)The shares used in the computation of basic and diluted FFO and AFFO per share attributable to Equinix is presented below:



Shares used in computing basic net income per 89,858 89,648 88,806 89,614 87,226 share, FFO per share and AFFO per share

Effect of dilutive securities:

Employee equity609 456 713 588 699 awards

Shares used in computing diluted net income per 90,467 90,104 89,519 90,202 87,925 share, FFO per share and AFFO per share



Basic FFO per $4.54 $ 3.80 $ 3.36 $ 13.01 $ 11.45 share

Diluted FFO per$4.51 $ 3.78 $ 3.33 $ 12.93 $ 11.36 share



Basic AFFO per $6.99 $ 7.05 $ 6.53 $ 21.06 $ 19.17 share

Diluted AFFO $6.94 $ 7.01 $ 6.48 $ 20.92 $ 19.02 per share



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SOURCE Equinix, Inc.