In the first datapoint from the colocation and datacenter sector, Equinix (NASDAQ:EQIX, news, filings) reported Q2 earnings after the bell yesterday. And quite a report it was! Revenues of $213.2M were above both expectations and guidance of $206-210M. Adjusted EBITDA of $99.5M was even better, well above projections of $92-94M, and earnings per share of $0.44 well above the street’s projections of $0.33 or so. Of course, the datacenter space has been the strongest in the sector throughout this recession, and we can only hope that the rest of the sector had even a sliver of the quarter these guys had.
The performance was good enough for them to raise full year EBITDA guidance to $390M and to finally give full year revenue guidance of $860-875M. For the second quarter, revenue and ebitda are projected to be $221-225M and $96-100M, respectively. Those numbers imply both visibility and confidence, but of course the colocation space almost always has pretty good visibility. The deals are longer term, and the barrier to switching providers is reasonably high.
In a separate announcement, Equinix announced that it has bought a 130K square foot datacenter in Frankfurt, Germany. The facility once belonged to Exodus, but will need to undergo a multi-phase upgrade before fully joining the rest of the company’s footprint. Equinix also announced a further expansion in their NY-4 facility, which rather misnamed given that it is actually in Secaucus, NJ.
Equinix is blessed with sufficient cash to continue investing in expansion despite the credit freeze – although perhaps not as fast as they would if money were still growing on trees. That means they stand to benefit both from potential price spikes from the imbalance in supply and demand and from any economic rebound as well. I wouldn’t want to be standing in front of these guys if the economy managed an unexpected U-turn.
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Categories: Datacenter · Financials
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Hopefully money will not grow on trees any more, as the excess debt of the past is as bad as the credit crunch of today.
I agree Equinix results were very good, even excluding the positive impact of currency fluctuations.
I was probably expecting the Company to slow growth in the future, I might have to review my models – apparently as strong as ever.