Earnings Preview Q3/11: Equinix

October 25th, 2011 by · Leave a Comment

This is a guest post by Paolo Gorgò.  If you might be interested in a guest post, then contact the webmaster.

Equinix (EQIX) will report Q3 earnings on Wednesday, October 26, after the market close.

Company's guidance for the third quarter expectsrevenues to range between $412 million and $417 million (including $18 million to $20 million in revenue from the recently acquired Brazilian subsidiary ALOG), and cash gross margins to come at approximately 65%. Adjusted EBITDA is expected to range between $180 million and $185 million, and includes approximately $4 million of contribution from ALOG. Equinix doesn't usually issue guidance as to EPS.

U.S. dollar exchange rates used for Q3 guidance were $1.42 to the euro, $1.61 to the pound and SGD$1.22 to the U.S. dollar. These three currencies represent short of 30% of Equinix revenues.

For the full year, Equinix expects total revenues to be greater than $1.59 billion, and we believe the company will take the opportunity to update investors on its 2011 forecast.

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Analysts, on average, expect Equinix to report revenues of around $ 416 million, in the high end of company's guidance.

Equinix's results will represent, as usual, a bellwether for the whole multi-tenant colocation sector, and will be followed on Thursday, before market open, by Digital Realty Trust (DLR), that will also add some color on the state of the wholesale market for data center services.

Recently, the company entered into a $150 million unsecured revolving credit facility, that added additional resources to the company's strong cash position, which is being used to fund expansion projects (Expansion Capex is expected to range between $130 million and $150 million in Q3 2011 alone, excluding ALOG). We wouldn't be surprised to hear about additional acquisitions strategic to entering new markets around the world. Here is a quote from Equinix's CEO:

Stephen Smith – CEO:

Our long-term goal is to build an unrivaled global data center footprint to power the interconnected world. This could take us to new markets, such as Latin America, Eastern Europe, the Middle East and emerging markets in Asia.

We are attaching, at the end of this article, a brief spreadsheet, resuming some data about the company in the last few quarters. The data can be downloaded at this link.

In addition to the usual suspects, revenue and adjusted EBITDA, we are also including some metrics, cabinet equivalents billing at quarter end and reported recurring revenue per cabinet equivalent, that are very useful to track the performance of the company.

Additional non financial metrics can also be found at this link, on the Equinix's I/R page.

Categories: Datacenter · Financials · Guest Posts

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