Equinix, Inc. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q2 revenues reached $1.47B, up 8% year-over-year (yoy), marking the company's 70th consecutive quarter of revenue growth.
  • Adjusted EBITDA was $720M, up 9% yoy. Margin reached 49% due to favorable revenue mix and lower non-recurring revenues.
  • AFFO was $558M, ahead of expectations, growing 14–18% yoy (guidance for 2020 raised).
  • Interconnection revenue grew 16% yoy, with notable increase in unit volumes and strong ECX Fabric adoption.
  • Americas region saw record gross bookings, though revenue growth was muted at 3% yoy due to smart hands fee waivers, churn timing, and FX.

Business & Operational Highlights

  • Third-best gross bookings quarter in company history, driven by record Americas bookings and strong channel performance.
  • Added 8,000 interconnections in Q2; now totals over 378,000.
  • ECX Fabric passed 2,200 participants; one-third of network providers now connecting to five or more clouds.
  • Internet exchange traffic surged 44% yoy due to remote work and increased content consumption.
  • Packet (bare-metal platform) integration progressing well; developing unified roadmap and enhanced enterprise features.

Geographic Performance

  • EMEA revenue up 16% yoy driven by strength in emerging markets (Dublin, Madrid) and interconnection pricing adjustments.

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Operator: Good afternoon and welcome to the Equinix Second Quarter Earnings Conference Call. All lines will be able to listen-only until we open for questions. Also, today's conference is being recorded. If anyone has any objections, please disconnect at this time. I'd now like to turn the call over to Katrina Rymill, Vice President of Investor Relations. You may begin. Katrina Rymill: Good afternoon, and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements we'll be making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be identified by the risks we identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K filed on February 21, 2020 and 10-Q filed on May 7, 2020. 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's Equinix' policy not to comment on its financial guidance during the quarter, unless it is 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 IR page at www.equinix.com.

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