Equinix (EQIX) Tops Q4 AFFO & Revenue Estimates, Guides Well
Zacks Investment Research | Feb 14, 2018 11:06PM ET
Equinix Inc. (NASDAQ:EQIX) posted better-than-expected fourth-quarter 2017 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate and increased from the year-ago quarter as well.
The company’s adjusted funds from operations (AFFO) advanced from $4.08 per share reported in the year-ago quarter to $4.82 per share. The Zacks Consensus Estimate was pegged at $4.80. The uptick primarily stemmed from robust top-line growth and strong operating performance, partially offset by elevated cost of revenues and share count.
AFFO is a non-GAAP financial measure generally used in the Real Estate Investment Trust (REIT) industry.
Quarter in Detail
Total revenues came in at $1.2 billion, up 27.3% from the year-ago quarter, beating the Zacks Consensus Estimate of $1.193 billion. This marked the 60th quarter of consecutive revenue growth. The year-over-year improvement was primarily driven by strong booking activity, global expansion, continued enterprise momentum and synergies from acquisition.
Equinix continues to witness solid demand for cloud services from corporations interested in enhancing the firms’ networks. The company observed revenue growth across all three geographic regions and verticals. Robust growth in the global Colocation and Interconnection platforms provided a boost to the top line.
Moreover, solid performance in MRR (monthly recurring revenues) per cabinet, MRR churn rate (2.2%) and cross connect additions drove the top line. Recurring revenues came in at $1.123 billion (94% of total revenues), up approximately 25.8% from the year-ago quarter. Non-recurring revenues climbed 54.6% to $77.6 million (6% of total revenues).
Revenues from the three geographic regions increased on a year-over-year basis as well. Revenues from the Americas, EMEA and Asia Pacific were up 38.9%, 22.4% and 9.8% to $606.2 million, $369.6 million, and $224.4 million, respectively.
Gross margin was 48.4%, down from 50.6% reported in the year-ago quarter, primarily due to elevated cost of revenues as a percentage of sales. Total operating expenses flared up 19.3% to $348.6 million. Further, operating expenses contracted 200 basis points (bps) as a percentage of revenues to 29%.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $564.8 million, up 29.4%. Adjusted EBITDA margins came in at 47.1% as compared with 46.3% reported in the year-ago quarter. AFFO increased 29.9% to $381.5 million during the reported quarter.
Equinix, Inc. Price, Consensus and EPS Surprise
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