Equinix Dials Its Growth Meter Back a Bit

July 24th, 2013 by · Leave a Comment

The carrier neutral data center giant Equinix (NASDAQ:EQIX, news, filings) is taking it on the chin again after hours following its Q2 earnings report.  Eating into their usually rock-steady growth profile were a change to the accounting of non-recurring revenues, the costs involved in the REIT conversion they are pursuing, and some foreign exchange effects.  

$ in millions
for continuing operations
Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Guidance
– Recurring 433.8 462.8 481.7 495.3 502.5
– Non-recurring 23.5 25.9 24.8 24.2 23.2
Revenues 457.2 488.7 506.5 519.8 525.7 Q3: 538-542, 2013:2135-2145
Cash COS 142.0 158.0 159.0 162.8 169.1
Cash SG&A 97.8 102.4 108.3 113.2 112.4 Q3:126-130, 2013:465-475
Adjusted EBITDA 217.5 228.3  239.3 243.5  244.2 Q3:236-240, 2013:985-990
Earnings Per Share 0.73 0.58 0.68 0.71 0.58
Ongoing Capex 37.5 37.6 43.5 34.0 40.2 Q3:50, 2013:165
Expansion Capex 158.9 174.5 166.9 41.7 82.7 Q3:130-150, 2013:410-460

That combination of headwinds brought their revenue, earnings, and EBITDA all in below expectations, and led to a lowering of forward guidance for both Q3 and the full year 2013.  Since such things don’t happen too often to Equinix, the market is understandably not too happy.  However, it doesn’t appear anything structural has changed all that much.

Operationally, Equinix passed the 120,000 mark on a strong quarter for cross connects.  I suspect that’s an industry-wide trend, although there aren’t many other public numbers to follow for it.  They saw growth across all three regions, with particular (albeit unsurprising) strength in the cloud vertical.

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Categories: Datacenter · Financials

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