Equinix, Inc. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q1 revenue reached $2.0B, up 16% year-over-year (compared to Q1 last year), driven by strong recurring revenue.
  • Adjusted EBITDA was $944M, up 18% year-over-year and above guidance due to strong operating performance and lower SG&A spend.
  • AFFO totaled $802M, outperforming expectations due to lower interest expense and taxes.
  • 4,000 deals were closed across more than 3,000 customers, in line with historic activity levels.
  • Pricing environment remained strong across all regions; interconnection revenue grew 12% year-over-year.
  • MRR churn remained low at 2%, with full‑year expectations at the low end of 2% to 2.5%.

Key Performance Highlights

  • Multi-region customers grew, with 76% using multiple regions and 65% using all three major regions (up 1% quarter-over-quarter).
  • xScale portfolio is over 75% leased, including full pre-leasing of the Frankfurt 16 site (14 MW).
  • Interconnection count reached 452,000+, with 5,300 new adds in the quarter.
  • Internet Exchange peak traffic rose 26% year-over-year, surpassing 30 Tbps.
  • Strong deal pipeline in AI-related workloads, spanning training (more xScale-oriented) and inference (more retail colo-oriented).
  • Channel partners accounted for ~35% of bookings and 60% of new logos.

Regional Performance

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Operator: Good afternoon, and welcome to today's conference call. Before we get started, I would like to remind everyone that some of the statements that we will be making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we've identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K filed February 17, 2023. The Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair Disclosure, it is Equinix's policy not to comment on its financial guidance during the quarter unless it's done through an explicit public disclosure. In addition, we will provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why the company uses these measures in today's press release on the Equinix Investor Relations page at www.equinix.com. We've made available on the IR page of our website a presentation designed to accompany this discussion, along with certain supplemental financial information and other data. We would also like to remind you that we post important information about Equinix on the IR page from time to time and encourage you to check our website regularly for the most current available informatio

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