Equinix Easily Bests Q1 Estimates

April 27th, 2011 by · Leave a Comment

Carrier neutral colocation provider Equinix (NASDAQ:EQIX, news, filings) easily bested guidance and analyst estimates for the first quarter of 2011, raising guidance for the full year as well.  As one might expect, the market is responding favorably after hours.  In addition, Equinix announced further expansion plans, including yet another major data center facility in the NYC metro market, which will give them eight, and more space in Chicago and Frankfurt.  Here is a quick table of the company's numbers in context:

$ in millions Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11

(guidance)

FY/11

(guidance)

- Recurring 237.2 282.1 314.7 326.3 343.9
- Non-recurring 11.4 14.0 15.6 18.9 19.1
Revenues 248.6 296.1 330.3 345.2 363.0 376-378 >1,525
COS 133.1 162.6 185.5 193.6 194.6
SG&A 62.6 83.1 89.8 96.3 97.1
Adjusted EBITDA 117.3 132.2 146.5 148.9 167.3 166-170 >685
Earnings Per Share 0.35 (0.05) 0.24 0.29
0.53
Ongoing Capex 14.5 26.9 40.7 32.4 32.7 40
Expansion Capex 128.9 121.8 103.2 111.0 139.8 220-240

Revenues: Revenues of $363M were up solidly sequentially and easily exceeded expectations of about $355M, but then beating guidance is what Equinix likes to do best.  In this case they were able to raise full year 2011 projections as well, and offered up a rare and bold forward target of reaching $2.0B in 2013.  Well, that seems reachable - but still it's something they didn't need to do that analysts will surely remember quite vividly if things change in the interim.

Costs & Earnings: While revenues surged, costs just edged up slightly, which means adjusted EBITDA and earnings per share saw quite a nice bump.  EBITDA of $167.3M was a full 15M above the projected range, and earnings per share of $0.53 certainly wasn't on the radar.  Projections of similar EBITDA levels for the second quarter suggest the pendulum on costs will swing back a bit, but again they were able to raise full year projections.

Capex & Expansion Plans: Equinix plans to spend a bundle of money on further capex, but that won't surprise anyone - building out more space is just what they do.  The new NYC metro area facility is expected to open in Q1/12, and will cost $140M while adding 156K square feet initially to their footprint with future expansion room to 328K square feet.  The Chicago and Frankfurt expansions are expected to cost $30M and $70M and add 19K and 102K square feet, respectively.

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Categories: Datacenter · Financials

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