Equinix(EQIX) - 2024 Q4 - Annual Results

Executive Summary & Highlights Fourth-Quarter and Full-Year 2024 Performance Overview Equinix reported strong Q4 and full-year 2024 results, achieving $8.7 billion revenue with 8% growth and record bookings - Equinix's full-year revenues increased 8% year-over-year on a normalized and constant-currency basis[2][3] - The company achieved 22 consecutive quarters of revenue growth and record-breaking gross bookings in Q4 and full year[2] - Equinix increased its quarterly cash dividend by 10% to $4.69 per share, marking the 10th consecutive year of increase[3] Key Financial Highlights (2024) Equinix's 2024 revenues reached $8.748 billion, operating income decreased 8%, and Adjusted EBITDA grew 160 bps to $4.097 billion | Metric | FY 2024 (Millions USD) | YoY Change (As-Reported) | YoY Change (Normalized & Constant-Currency) | | :------------------------------------------------ | :--------------------- | :----------------------- | :--------------------------------------- | | Revenues | $8,748 | +7% | +8% | | Operating Income | $1,328 | -8% | N/A | | Net Income Attributable to Common Stockholders | $815 | -16% | N/A | | Net Income per Share Attributable to Common Stockholders | $8.50 | -18% | N/A | | Adjusted EBITDA | $4,097 | N/A | N/A | | Adjusted EBITDA Margin | 47% | +160 bps | N/A | | AFFO | $3,356 | +11% | +12% | | AFFO per Share | $35.02 | +9% | +10% | - Operating Income and Net Income were impacted by $314 million of non-recurring charges related to asset impairments, restructuring, and transaction costs[7] 2025 Annual Guidance Snapshot Equinix projects 2025 revenues of $9.033-$9.133 billion (7-8% growth), Adjusted EBITDA of $4.386-$4.466 billion (49% margin) | Metric | FY 2025 Guidance (Millions USD) | YoY Change (As-Reported) | YoY Change (Normalized & Constant-Currency) | | :------------------------------------------------ | :----------------------------- | :----------------------- | :--------------------------------------- | | Revenues | $9,033 - $9,133 | +3% to +4% | +7% to +8% | | Adjusted EBITDA | $4,386 - $4,466 | N/A | N/A | | Adjusted EBITDA Margin | 49% | +190 bps | N/A | | AFFO | $3,606 - $3,686 | +7% to +10% | +9% to +12% | | AFFO per Share | $36.69 - $37.51 | +5% to +7% | +7% to +9% | Business Highlights & Strategic Initiatives AI Infrastructure Leadership & Demand Equinix leads in private AI infrastructure, with Q4 deals focused on AI, strong xScale demand, and a new private AI solution - Equinix is a leader in private AI infrastructure, with over half of Q4's top 25 retail deals focused on high-performance compute and AI workloads[11] - The global xScale portfolio saw robust demand, leasing an incremental 31 megawatts in Q4, totaling over 400 megawatts globally[11] - Equinix announced a private AI solution in December, utilizing the Dell AI Factory with NVIDIA, for scalable, secure, and low-latency AI model training and deployment[11] Global Expansion & Data Center Footprint Equinix expands its global data center footprint with 62 projects, including 16 xScale, and a major U.S. xScale joint venture - Two-thirds of Equinix's recurring revenues come from customers deploying in more than 10 IBX data centers[11] - Currently, 62 major projects are underway in 36 markets across 25 countries, including 16 xScale projects, to add ~34,000 cabinets and >165 megawatts by end of 2026[11] - Equinix plans to nearly triple capital invested in its xScale portfolio with a >$15 billion joint venture with CPP Investments and GIC for new U.S. facilities[12] - New data center builds include Singapore 6 (20 megawatts for AI) and the first IBX data center in Jakarta, Indonesia[12] Interconnection Growth Equinix's global interconnection franchise grew to over 482,000, with revenues up 9% year-over-year, supporting hybrid multi-cloud architectures - Global interconnection franchise reached over 482,000 total interconnections, adding 6,000 in Q4 2024[12] - Interconnection revenues increased 9% year-over-year (as-reported and normalized/constant-currency), accounting for 19% of recurring revenue[12] - Equinix Fabric supports quick setup and flexible management of connections across hybrid multi-cloud architectures with 25 and 50 gigabit per second circuits[12] Sustainability Initiatives Equinix commits to sustainability, improving PUE by over 6%, achieving CDP's 'Climate Change A List,' and issuing €1.15 billion in green bonds - Equinix improved its Power Usage Effectiveness (PUE) by over 6% in 2024[12] - Achieved the highest ranking on CDP's 'Climate Change A List' for the third consecutive year and received its first MSCI 'AAA-rating'[12] - Issued an additional €1.15 billion in green bonds in Q4, totaling approximately $6.9 billion, making it a top five U.S. issuer in the investment-grade green bond market[12] Financial Performance (GAAP) Condensed Consolidated Statements of Operations Equinix's 2024 revenues reached $8.748 billion, but operating income decreased 8% to $1.328 billion due to non-recurring charges | Metric (Millions USD, except EPS) | FY 2024 | FY 2023 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Revenues | $8,748 | $8,188 | +6.8% | | Cost of revenues | $4,467 | $4,228 | +5.6% | | Gross profit | $4,281 | $3,960 | +8.1% | | Total operating expenses | $2,953 | $2,517 | +17.3% | | Income from operations | $1,328 | $1,443 | -8.0% | | Net income (loss) | $814 | $969 | -16.0% | | Net income (loss) attributable to common stockholders | $815 | $969 | -15.9% | | Diluted EPS | $8.50 | $10.31 | -17.5% | - Operating expenses in 2024 included $31 million in restructuring charges, $50 million in transaction costs, and $233 million in impairment charges, significantly impacting operating income and net income[40] Condensed Consolidated Statements of Comprehensive Income Equinix reported $814 million net income in 2024, but a $(445) million comprehensive loss, mainly from foreign currency, significantly reduced total comprehensive income | Metric (Millions USD) | FY 2024 | FY 2023 | YoY Change | | :------------------------------------------------ | :------ | :------ | :--------- | | Net income (loss) | $814 | $969 | -16.0% | | Foreign currency translation adjustment (CTA) gain (loss) | $(772) | $250 | -408.8% | | Net investment hedge CTA gain (loss) | $295 | $(132) | +323.5% | | Unrealized gain (loss) on cash flow hedges | $32 | $(19) | +268.4% | | Total other comprehensive income (loss), net of tax | $(445) | $99 | -549.5% | | Comprehensive income (loss) attributable to common stockholders | $370 | $1,068 | -65.3% | Condensed Consolidated Balance Sheets As of Dec 31, 2024, total assets increased to $35.085 billion, driven by cash and PPE, with liabilities rising to $21.533 billion from senior notes | Metric (Millions USD) | Dec 31, 2024 | Dec 31, 2023 | YoY Change | | :------------------------------------ | :----------- | :----------- | :--------- | | Cash and cash equivalents | $3,081 | $2,096 | +46.9% | | Total current assets | $5,447 | $3,568 | +52.7% | | Property, plant and equipment, net | $19,249 | $18,601 | +3.5% | | Total assets | $35,085 | $32,651 | +7.5% | | Total current liabilities | $3,349 | $3,162 | +5.9% | | Senior notes, less current portion | $13,363 | $12,062 | +10.8% | | Total liabilities | $21,533 | $20,137 | +6.9% | | Total common stockholders' equity | $13,528 | $12,489 | +8.3% | | Total headcount | 13,606 | 13,151 | +3.5% | Summary of Debt Principal Outstanding As of Dec 31, 2024, total debt principal outstanding increased to $17.609 billion, primarily due to a rise in senior notes to $14.562 billion | Debt Type (Millions USD) | Dec 31, 2024 | Dec 31, 2023 | YoY Change | | :----------------------------- | :----------- | :----------- | :--------- | | Finance lease liabilities | $2,275 | $2,261 | +0.6% | | Term loans | $628 | $642 | -2.1% | | Mortgage payable and other loans payable | $21 | $29 | -27.6% | | Senior notes | $14,562 | $13,060 | +11.5% | | Total debt principal outstanding | $17,609 | $16,101 | +9.4% | Condensed Consolidated Statements of Cash Flows Net cash from operations was $3.249 billion in 2024, investing used $(3.937) billion, financing provided $1.723 billion, resulting in $(601) million free cash flow | Metric (Millions USD) | FY 2024 | FY 2023 | YoY Change | | :------------------------------------------ | :------ | :------ | :--------- | | Net cash provided by operating activities | $3,249 | $3,217 | +1.0% | | Net cash used in investing activities | $(3,937) | $(3,224) | +22.1% | | Net cash provided by (used in) financing activities | $1,723 | $211 | +716.6% | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $986 | $188 | +424.5% | | Cash, cash equivalents and restricted cash at end of period | $3,082 | $2,096 | +47.0% | | Free cash flow | $(601) | $129 | -566.0% | | Adjusted free cash flow | $(264) | $513 | -151.5% | - Purchases of property, plant and equipment increased to $3,066 million in 2024 from $2,781 million in 2023[48] - Proceeds from senior notes, net of debt discounts, were $2,768 million in 2024, significantly higher than $902 million in 2023[49] Non-GAAP Financial Measures & Reconciliations Explanation of Non-GAAP Measures Equinix uses non-GAAP measures (Adjusted EBITDA, FFO, AFFO) to clarify ongoing operating results, excluding non-cash or non-core items - Non-GAAP measures (e.g., Adjusted EBITDA, FFO, AFFO) are used to evaluate operations, as GAAP measures alone may be difficult to interpret for ongoing results[24] - Adjusted EBITDA excludes income tax, interest, depreciation, amortization, stock-based compensation, restructuring, impairment, and transaction costs, among others[26][27][29] - FFO and AFFO are supplemental performance measures commonly used in the REIT industry, with AFFO further adjusting FFO for non-real estate depreciation, recurring capital expenditures, and other non-cash items[30][31][32] Adjusted EBITDA and Margins Equinix's 2024 Adjusted EBITDA was $4.097 billion (47% margin), up from $3.702 billion, with a strong 71% flow-through rate | Metric (Millions USD, except %) | FY 2024 | FY 2023 | YoY Change | | :------------------------------------ | :------ | :------ | :--------- | | Adjusted EBITDA | $4,097 | $3,702 | +10.7% | | Adjusted EBITDA Margins | 47% | 45% | +200 bps | | Adjusted EBITDA flow-through rate | 71% | 36% | +3500 bps | | Americas Adjusted EBITDA | $1,709 | $1,614 | +5.9% | | EMEA Adjusted EBITDA | $1,378 | $1,251 | +10.2% | | Asia-Pacific Adjusted EBITDA | $1,010 | $837 | +20.7% | | Region | FY 2024 Adjusted EBITDA Margins | | :------------- | :------------------------------ | | Americas | 44% | | EMEA | 46% | | Asia-Pacific | 53% | Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) FFO decreased to $2.061 billion in 2024, while AFFO increased 11.2% to $3.356 billion, with diluted AFFO per share at $35.02 | Metric (Millions USD, except per share) | FY 2024 | FY 2023 | YoY Change | | :-------------------------------------- | :------ | :------ | :--------- | | FFO attributable to common stockholders | $2,061 | $2,130 | -3.2% | | Diluted FFO per share | $21.51 | $22.66 | -5.1% | | AFFO attributable to common stockholders | $3,356 | $3,019 | +11.2% | | Diluted AFFO per share | $35.02 | $32.11 | +9.1% | Geographic Revenue and Cost Breakdown Worldwide revenues totaled $8.748 billion in 2024, with Colocation as the largest segment, and regional cash gross margins varying | Service Type (Millions USD) | FY 2024 Worldwide Revenues | FY 2023 Worldwide Revenues | YoY Change | | :-------------------------- | :------------------------- | :------------------------- | :--------- | | Colocation | $6,058 | $5,765 | +5.1% | | Interconnection | $1,519 | $1,395 | +8.9% | | Managed infrastructure | $467 | $452 | +3.3% | | Other | $140 | $133 | +5.3% | | Recurring revenues | $8,184 | $7,745 | +5.7% | | Non-recurring revenues | $564 | $443 | +27.3% | | Total Revenues | $8,748 | $8,188 | +6.8% | | Region (Millions USD) | FY 2024 Revenues | FY 2023 Revenues | YoY Change | | :-------------------- | :--------------- | :--------------- | :--------- | | Americas | $3,862 | $3,617 | +6.8% | | EMEA | $2,967 | $2,838 | +4.5% | | Asia-Pacific | $1,919 | $1,733 | +10.7% | | Region | FY 2024 Cash Gross Margins | FY 2023 Cash Gross Margins | | :------------- | :------------------------- | :------------------------- | | Americas | 70% | 71% | | EMEA | 60% | 58% | | Asia-Pacific | 67% | 64% | | Worldwide | 66% | 65% | Business Outlook & Guidance First Quarter 2025 Outlook Equinix anticipates Q1 2025 revenues of $2.191-$2.231 billion, flat on a normalized basis, with Adjusted EBITDA of $1.011-$1.051 billion | Metric (Millions USD) | Q1 2025 Guidance | | :-------------------------- | :--------------- | | Revenues | $2,191 - $2,231 | | Adjusted EBITDA | $1,011 - $1,051 | | Recurring Capital Expenditures | $24 - $47 | - Q1 2025 revenue guidance includes a $28 million step-up from recurring revenues, offset by lower sequential non-recurring revenues and a $38 million negative foreign currency impact[13] - Adjusted EBITDA guidance includes $25 million of higher seasonal costs and a $20 million negative foreign currency impact[13] Full-Year 2025 Outlook Equinix projects full-year 2025 revenues of $9.033-$9.133 billion (7-8% growth), Adjusted EBITDA of $4.386-$4.466 billion (49% margin) | Metric (Millions USD, except per share) | FY 2025 Guidance | | :-------------------------------------- | :--------------- | | Total Revenues | $9,033 - $9,133 | | Adjusted EBITDA | $4,386 - $4,466 | | Adjusted EBITDA Margin | 49% | | AFFO | $3,606 - $3,686 | | AFFO per Share | $36.69 - $37.51 | | Total Capital Expenditures | $3,222 - $3,472 | | Non-recurring Capital Expenditures | $2,985 - $3,215 | | Recurring Capital Expenditures | $237 - $257 | - Full-year 2025 guidance includes a $252 million negative foreign currency impact on revenues and a $139 million negative impact on Adjusted EBITDA compared to prior guidance rates[14] - Adjusted EBITDA margin is expected to improve by 190 basis points year-over-year due to operating leverage and power pass-through[14] Foreign Currency Exchange Rate Assumptions Equinix's 2025 guidance incorporates updated U.S. dollar exchange rates for key currencies, with Euro, British Pound, and Singapore Dollar as major revenue contributors | Currency | 2025 Guidance Exchange Rate (USD) | | :--------------- | :------------------------------ | | Euro | $1.07 | | British Pound | $1.27 | | Singapore Dollar | S$1.37 to the U.S. Dollar | | Japanese Yen | ¥157 to the U.S. Dollar | | Australian Dollar | A$1.62 to the U.S. Dollar | | Hong Kong Dollar | HK$7.77 to the U.S. Dollar | | Brazilian Real | R$6.17 to the U.S. Dollar | | Canadian Dollar | C$1.44 to the U.S. Dollar | | Currency | Q4 2024 Global Revenue Breakdown | | :--------------- | :----------------------------- | | Euro | 20% | | British Pound | 10% | | Singapore Dollar | 9% | | Japanese Yen | 5% | | Australian Dollar | 4% | | Hong Kong Dollar | 3% | | Brazilian Real | 2% | | Canadian Dollar | 2% | Additional Information Conference Call and Investor Resources Equinix held a conference call on Feb 12, 2025, to discuss Q4 2024 results and outlook, with webcast replay and supplemental materials available - Equinix discussed Q4 2024 results and future outlook on a conference call on February 12, 2025, with a live webcast and replay available[18][19] - An investor presentation and supplemental financial information are available on the Equinix Investor Relations website[20] About Equinix Equinix is the world's digital infrastructure company, providing a trusted platform for digital leaders to interconnect foundational infrastructure - Equinix is the world's digital infrastructure company, enabling digital leaders to interconnect foundational infrastructure at software speed[22] - The company helps organizations scale with agility, speed digital service launches, deliver world-class experiences, and achieve sustainability goals[22] Forward-Looking Statements and Risk Factors Forward-looking statements involve risks and uncertainties, including inflation, foreign currency, power costs, and acquisition challenges, as detailed in SEC filings - Forward-looking statements involve risks and uncertainties, and actual results may differ materially from expectations[37] - Risks include inflation, foreign currency fluctuations, power availability and costs, challenges in data center operations and construction, acquisition integration difficulties, competition, and REIT taxation risks[37] - Investors should refer to Equinix's SEC filings for a comprehensive description of risk factors[37]